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AnnuAl RepoRt 2013we keep it going

AustriAn Power Grid AG

AuStRIAn poWeR GRID AG

three-yeAr comPArison

€m 2013 2012 2011

Revenue 573.7 536.4 466.4

Earnings before interest and taxes (EBIT) 68.7 43.0 23.4

Result from ordinary activities 50.3 19.7 2.3

Net income for the financial year 37.7 15.6 1.0

Total assets 1,463.1 1,435.9 1,243.2

Fixed assets 1,187.1 1,155.2 1,083.5

Capital expenditure on tangible fixed assets 102.1 136.1 116.7

Depreciation of tangible fixed assets 67.1 62.8 59.1

Equity 313.0 274.3 258.1

Return on sales (ROS) 12.0% 8.0% 5.0%

Return on equity (ROE) 16.1% 6.6% 0.8%

Return on investment (ROI) 4.8% 3.5% 2.1%

Equity-to-assets ratio 24.0% 21.8% 23.9%

Debt repayment period n/a 8.5 4.9

Net cash flow from operating activities1) 97.9 129.1 64.7

Net gearing1) 220.1% 295.8% 264.7%

Number of employees 437 451 434

(of which apprentices) 25 24 22

transport volume (gwh) 43,137 42,144 39,830

1) The key figures were revised in 2013 and prior year's figures have been adjusted.

In 2013, the fictitious debt repayment period pursuant to Section 24 of the Company Reorganisation Act (Unternehmensreorganisationsgesetz, URG) represents a separate line item. The reason lies in the change in ac-counting treatment of the regulatory tariff provisions recognised in 2012. They were reported as long-term provisions until 2012, and as a current interest-free liability starting in 2013. Newly allocated tariff provisions are recognised as current interest-free provisions for liabilities.

In addition, the provisions for repayment pursuant to the System Usage Rates Directive (SNT-VO) and System Charges Orders (SNE-VO) are expected to be utilised in 2014; therefore, the recognised provisions are reported as current in the 2013 annual financial statements. Thus, the key figure for 2013 does not provide any meaningful information.

AnnuAl RepoRt 2013we keep it going

AustriAn Power Grid AG

AUSTRIAN POWER GRID AG ANNUAL REPORT 2013

0302

SUpeRViSoRY BoARD

Gewerke ddr. erhard schaschlChairman until 22/10/2013

ing. Mag. Peter KorenChairman from 23/10/2013

dr. ulrike Baumgartner-Gabitzer1st Vice Chairwoman stepped down on 18/1/2013

dr. Johann sereinig 1st Vice Chairman from 28/1/2013

Mag. dr. erich entstrasser

dr. Christof Germannfrom 28/2/2013

dr. Günther rabensteiner from 28/2/2013

dr. Martin schmidstepped down on 28/2/2013

Mag. Leopold rohrer

Mag. dr. Georg w. westphal

eMpLoYee RepReSentAtiVeS

Harald novak Chairman of the Central Works Council, 2nd Vice Chairmanuntil 31/10/2013

ing. wolfgang LiebscherCentral Works Council, 2nd Vice Chairmanfrom 1/11/2013

Andreas Gross Central Works Council

Karl-Heinz stieger Central Works Council

eXeCUtiVe BoARD

Mag. thomas Karall

di Mag.(FH) Gerhard Christiner

woRking AnD AUDit CoMMittee

ddr. erhard schaschlChairman until 22/10/2013

dr. ulrike Baumgartner-Gabitzer1st Vice Chairwoman,stepped down on 18/1/2013

dr. Johann sereinig1st Vice Chairmanfrom 28/1/2013

Harald novak2nd Vice Chairmanuntil 31/10/2013

ing. wolfgang Liebscher2nd Vice Chairman from 1/11/2013

GoVerninG Bodies oF tHe CoMPAnY

Contents

Governing bodies of the Company 03

Foreword by the executive Board 05

MAnAgeMent RepoRtenergy market environment 16

legal framework 18

Regulatory framework 19

General economic framework 20

Security of supply and grid operations 21

Grid security and development 22

International 25

Non-financial performance indicators 26

personnel 27

Research, innovation and the environment 28

Financial performance indicators 29

Cash flow statement 31

opportunity and risk management 33

outlook 2014 34

AnnUAL FinAnCiAL StAteMentSBalance sheet 36

Income statement 38

Statement of changes in fixed assets 40

Maturity schedule 42

Statement of changes in untaxed reserves 44

Details on equity investments 45

Notes to the financial statements 46

Glossary 58

Auditor’s report 60

Report of the Supervisory Board 62

4


05

In 2013, ApG had to overcome numerous challenges – with respect to both the market environment as well as grid operations. the prevailing market trends of the past few years also continued into the reporting period. In 2013, wholesale electricity prices continued their decline on futures markets. the main driver of this was the ambitious expansion in the area of renewable energy, in particular in Germany, which showed no signs of slowing. this trend was noticeable in Austria due to reduced thermal generation in some cases and the associated very high occasional elec-tricity import peaks of over 5,000 MW.

In the spring of 2013, the ApG grid was affected by two exceptional events. At the end of May 2013, a new trans-former was destroyed when it was put into operation during a fire at the St. Peter substation. Only a few days later, a heavy mudslide put the important 380 kV tauern–Lienz line out of operation in the wake of a major flood. As a result, the grid was strained for many weeks; however, the situation was brought under control through a series of technical grid measures and quickly installed provisional system solutions.

Despite the difficult circumstances, we were able to imple-ment important operational expansion projects as planned. For instance, the Danube line – the line from the St. peter substation to the Dürnrohr substation – was successfully converted to 380 kV. the assembly of the third and fourth line systems on the 380 kV transmission line Dürnrohr–Sarasdorf started on schedule in november 2013. this line plays an important role in supplying electricity to the metropolitan area of Vienna as well as in integrating the new wind power plants to be added in lower Austria in the next few years.

the central ApG Salzburg line project – in the section from the St. peter network node to the tauern network node – reached another milestone. on 8 January 2014, the environmental impact assessment (eIA) report was made available for public review and the date of the public environmental hearing was set by order of the responsible environmental authorities. Consequently, one of Austria’s most important energy transition projects today is enter-ing a decisive phase.

APG also made significant progress with respect to elec-tricity market integration in 2013. In the area of system loss procurement, the Company was able to increase the number of suppliers in connection with the associated calls for tenders, thereby achieving better outcomes in the call for tender. the Company also had great success in the area of balancing energy market liberalisation. the Imbalance netting Cooperation (InC) entered into in the middle of 2013 with the Slovenian transmission operator eleS and the call for tenders for primary control power issued for the first time together with the Swiss transmission operator Swissgrid have already saved approximately €8m in costs.

ApG's activities at the international level in 2013 also fo-cused, among other things, on devising the network codes that will form the future legally binding framework for the european electricity market. two of the most important codes are being developed at the european level under the direction of ApG colleagues. three of the four operating codes have already been recommended for comitology to the european Commission by the european Agency for the Cooperation of energy Regulators (ACeR).

The Joint Office of the TSC (the TSO Security Cooperation) in Munich commenced its activities in 2013. the task of the Joint Office of 12 partner grid operators is to further optimise grid operations and thus secure cross-border grid operations on the basis of closer collaboration between the colleagues sent to work in the office.

In the autumn of 2013, ApG presented its Master plan 2030, which describes the strategic development re-quirements in ApG's grid. the current energy market analysis shows that ApG's grid concept is sustainable and future-proof also in view of the new developments on the european electricity market. the inclusion of 7 out of 10 ApG master plan projects on the list of projects of Com-mon European Interest (PCI) confirms APG’s long-term planning.

the energy market environment will also remain very exciting in the coming years. the transformation of the eu-ropean energy system, the integration of renewable energy and secure grid operations will continue to represent major challenges for all participants. However, we are well prepared for the next few years with a highly qualified team that is passionate and committed to accomplishing these tasks. thus, we will continue to make our contribution to the secure supply of electricity and to a successful energy transition – in our typically reliable manner.

Apg executive Board

Mag. thomas Karall DI Mag.(FH) Gerhard Christiner Dr. ulrike Baumgartner-Gabitzer

Foreword BY tHe eXeCutiVe BoArd

4


6

AUSTRIAN POWER GRID AG ANNUAL REPORT 2013AuStRIAn poWeR GRID AGAnnuAl RepoRt 2013

sABrinA KronABitterPlant Management, team Leader Grid technology APG

“As a grid technician at APG, I experience first-hand which changes the energy transition brings about. In our plants, we have modernised and improved significantly in recent years. And it is becoming increasingly difficult to carry out the necessary measures, because we only have a small time slot available in which we can shut down plants for inspec-tion purposes. The grid is simply reaching its capacity limits. One has to be able to handle challenges.”


“Renewable resources are the future of electricity generation. Austria has a long tradition of hydropower generation. Wind power and photovoltaics still have great potential, but they are placing entirely new requirements on the operation of a power grid. I am working on a closely related challenge – namely on improving the outlook for green electric-ity. My personal contribution to the energy revolution, as it were.”

CHristoPH KArneroperational Management & Green electricity, outlook for Green electricity APG


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380 KV RInG

380 kV lineproject 380 kV salzburg line220 kV lineproject 220 kV linesubstationproject substationAPG grid nodes

tHe BACkBone oF AUStRiAn poweR SUppLY

PleintingPirach

AltheimSimbach

Podlog

Sokolnice

MemmingenLeupolz

Pradella

Maribor

Slavetice

GyörSzombathely

Györ

ST. PETER

DDellmensingenObermooweiler

OBER-SIELACH

Hessenberg

WIENSÜDOST

BISAM-BERG

LIENZ

WESTTIROL

OberbrunnKrün

DÜRNROHR

Weißenbach

ERNSTHOFEN

SARAS- DORF

KAINACHTAL

TAUERNBonaduzMontlingenWinkel

Zell amZiller

CH I

SLO

H

CZ

SK

380 KV seCuritY rinG – tHe BACKBone oF AustriAn Power suPPLY

eLeCtRiCitY MARket integRAtion – tHe pAtH to tHe eURopeAn DoMeStiC eLeCtRiCitY MARket

the third package for the eu domestic market entailed substantially stricter unbundling rules. In Austria, these new requirements with respect to the transmission grid were implemented with the certification of Austrian Power Grid AG (ApG) as an independent transmission operator (Ito) in March 2012.

As markets have become increasingly integrated, the role of the european transmission operators has changed significantly over the course of the last few years. The power grid infrastructure has become more important. the high-performance lines connecting neighbouring european countries are the physical foundation enabling increasingly intense european electricity trading. uniform, eu-wide rules and standards for this market are another require-ment for implementing a deregulated electricity market. european transmission operators also play an important role here, because they are developing the network codes on behalf of eu authorities, i.e. the legally binding basis for all grid operators and market participants in europe that governs all relevant issues in this context. this includes,among other things, standards for the areas of grid security, processes for allocating capacities and uniform transparency rules.

integRAtion oF RenewABLe eneRgY – MAJoR CHALLengeS FoR tHe poweR gRiD

the political decisions setting the course in the area of climate protection in europe were also made back in the 1990s. electricity generation from renewable sources of energy began expanding as a result. However, the growth of renewable electricity generation took on unforeseeable momentum triggered by the catastrophe in Fukushima and the subsequent decision on the part of the German federal government to speed up its phase out of nuclear energy. Within a few years, european power plant facilities and their utilisation changed significantly.

europe is standing by its 20-20-20 climate protection targets and affirmed them in its Energy Roadmap 2050. the provision of electricity is to be Co2-neutral in europe by 2050. In order to achieve this, approximately 80% of electricity must be generated from renewable sources of energy. As early as 2020, the installed wind power capac-ity in europe alone will have increased to far more than 200 GW. Austria is also following this trend. An installed wind power capacity of approximately 4,000 MW can be expected by 2020 based on the Austrian Green electricity Act (Ökostromgesetz, ÖSG), corresponding to almost twice the capacity of the entire Danube power plant chain. the installed photovoltaic capacity is even expected to in-crease twelve times over in the same period.

the strong and above all rapidly advancing expansion of renewable electricity generation means increasing require-ments on the electricity transmission grid. As the national power grid operator, ApG is also responsible for balancing electricity generation and consumption all over Austria. the required balancing management is becoming increas-ingly complex and elaborate – to the same extent in which power plants that continuously and consistently feed in are being replaced by feature-dependent wind and photovol-taic systems, which manage to feed in very large amounts of electricity in good weather conditions, but may not produce any electricity at times. In light of the enormous wind power and photovoltaic capacities that are meanwhileon the grid all over Europe, the massive fluctuations in capacity occurring on short notice are also becoming an increasingly enormous challenge for grid stability. Further-more, the new wind power and photovoltaic systems – in particular in Germany – are being built far from the major utilisation centres and require a corresponding grid infra-structure. In Austria, the challenge lies in connecting new wind power plants in the east with the pumped storage power plants in the west.

As a result of promoting renewable energy on the dereg-ulated electricity market, generation capacities that are urgently needed to balance out fluctuations in wind and solar power generation are coming under increasing price pressure and may possibly be lost as suppliers of balancing energy in the long term if these operating conditions do not change.

we KeeP it GoinG

380 kV security ring

10

AUSTRIAN POWER GRID AG ANNUAL REPORT 2013AnnuAl RepoRt 2013

rutH KAssouMeMarket Management, Office Manager APG

“The conversion to renewable energy sources is a task for several generations to come. And it is a task that requires the efforts of many participants all over Europe. In my daily work, I have a lot of contact with colleagues of our European partners. And all are working towards the same goal. It is great fun to be a part of this development.”


sVen ABerLeLine Management, Project Manager APG

“My job as a project manager at APG is to prepare our lines for constantly increasing loads. The speed of expansion in renewables has made my work schedule considerably busier. More and more projects must be completed in less and less time. But the grid is the crucial foundation for the integration of wind and solar power.”

12 13


tHe RigHt AppRoACH – FUtURe CHALLengeSApG is facing an ambitious investment programme in the coming ten years. Approximately €2.6bn must flow into improving and expanding ApG’s grid in order to prepare the domestic power grid for the developments of the coming decade. In addition to the necessary stable financing, APG will depend on the support of the responsible authorities. In light of the rapid developments in the expansion of renewable energy sources, it is necessary to be able to implement central expansion and conversion projects in the grid segment as quickly as possible. optimisation and acceleration of the underlying official approval processes will be among the key factors for realising the necessary grid improvements.

Maintaining the high standard of security and quality in electricity supply to which Austrians are accustomed is the necessary foundation for safeguarding Austria as a place to live and conduct business. Additionally, the forward-looking investments in the Austrian power grid are an important impulse for the domestic economy. According to corresponding studies at the Graz university of technologyand the Institute of Industrial Science (IWI), every one billion euros invested by ApG can be expected to generate around 70% in added value for the domestic economy and, creating an additional 13,000 jobs.

we KeeP it GoinGwe KeeP it GoinG

While the need for balancing energy is increasing, the number of flexible power plants available is decreasing at the same time. the developments described are pushing the european transmission grids closer and closer to its generation and capacity limits. executing the permanent conversion to renewable energy while at the same time not endangering the security of supply in europe will requirethe rapid conversion and expansion of the power grid infrastructure.

eneRgY tRAnSition in AUStRiA – A MoDeL oF SUCCeSS

Compared to other european countries, Austria is well on its way to implementing the energy transition. A particular-ly important factor of success is Austria’s comparably good synchronisation of developments in generation sources and the grid segment. With the network Development plan (nDp), which ApG has prepared, made available for public discussion and updated annually since 2011 in accordancewith the Austrian electricity Industry and organisation Act (elektrizitätswirtschafts- und -organisationsgesetz, elWoG), Austria has an instrument at its disposal that is intended to ensure the balanced development of the do-mestic electricity supply structure. the nDp includes all power plant projects planned in Austria over the next 10 years as well as the grid infrastructure measures urgently required in this same period.

In order to analyse the long-term energy market trends and derive therefrom the overriding strategic planning perspective for the domestic electricity transmission grid, ApG also prepares the ApG Master plan. In the autumn of 2013, the current issue, Master plan 2030, was published, covering the planning period from 2013 to 2030. Various energy market development scenarios were examined and foreseeable weaknesses in the Austrian transmission grid were identified with the help of the responsible author-ities, academic experts (Vienna university of technology,Graz university of technology), representatives from the field of renewable energy (IG Windkraft, Photovoltaic Austria) and nGos (Greenpeace, Global 2000, WWF). ApG’s strategic grid concept, whose core is the 380 kV security ring, proved itself to be a cost-optimised and sustainably resilient concept for the future in all analysed scenarios. The APG grid concept receives additional confirmation due to the fact that it is not only a part of the ten-Year network Development plan (tYnDp), updated every two years by the european network of transmission System operators (entSo-e), but also that seven out of ten ApG priority Master plan projects have been included in the list of projects of Common Interest (pCI) by the european Commission.

ApG has also achieved major advances in recent years in connection with the european integration of the domestic electricity market. Significant milestones were achieved for instance with cross-border cooperations to expand the balancing energy market as well as with cooperations involving common calls for tenders for primary control power. this resulted in balancing energy cost savings of approximately €8m in 2013 alone.

14 15

AUSTRIAN POWER GRID AG ANNUAL REPORT 2013AnnuAl RepoRt 2013

steFAn tABerniGPlant Management, Line team APG

“The APG line team is, as it were, the first-aid response team for the APG grid. I am therefore used to being dispatched at all times of day and night, whenever there is a problem somewhere. I can tell though that the time factor is becoming increasingly important. Even if nobody’s lights go out during a line outage – the overall grid load barely permits going without a line for long.”


BirGit BreiterCommunications, Project Communications APG

“Just a few years ago, climate protection was a controversial topic in the public discussion. Today, almost everyone is convinced that the conversion to renewable energy sources must succeed. However, in my perception, not everyone is aware of what is required to make this happen. Part of my job is to convince others to take specific actions that are necessary in order to someday reach the goal of a renewable energy future. An exciting task.”

16 17


In order to promote further development of the cross-bor-der balancing energy market, ApG is conducting further ne-gotiations with the transmission operators from Switzer-land, Slovenia, Germany and the Czech Republic. A possible expansion of the existing cooperation between ApG and Swissgrid in the area of primary balancing to Germany is also currently being analysed.

implementation of the intraday marketthe intraday market serves to balance the short-term supply and demand of electricity. After the Austrian intra-day market was successfully launched and immediately connected to Germany in october 2012 in a mutual project with epeX Spot, ApG joined the project to implement the european target model for intraday. the transmission system operators (tSos) and electricity exchanges of north-western europe as well as Switzerland and Austria are participating in this project. the development of com-mon functionalities is planned for the end of 2014 in order to create the basis for harmonised europe-wide intraday trading.

thus, ApG does not only comply with future legal and regu-latory requirements, but is also creating the foundation on which Austria can directly benefit from the liquidity of the intraday markets in north-western europe.

entso-e network codes european tSos are responsible through entSo-e (in accordance with Art. 8 of Regulation (eC) no. 714/2009) for the development and implementation of network codes. These network codes define and harmonise numerous rules for the power grid, among other things in the areas of grid operations, grid access, congestion management and balancing energy. In addition, they form the basis for a common european electricity market, which the european union would like to achieve by 2014. network codes are the most important components of the future legal frame-work for the european electricity market. After entering into force, the network codes become a direct part of the aforementioned eu regulation and therefore also directly applicable legal bases.

Accordingly, ApG is also helps to devise all of the networkcodes. Since 2012, ApG has provided the chairmen as well as the development team leader at entSo-e for two especially important codes: the operational Security Code, which serves as an “umbrella code” for the operating codes, and the Balancing Code, which defines the bases for the future balancing energy markets.

In the autumn of 2013, three out of a total of four network codes were positively assessed by the european Agencyfor the Cooperation of energy Regulators (ACeR) and recommended to the eu Commission for comitology. the Commission will open the respective procedures in 2014 and possibly also complete them by the end of that year. Concrete implementation would thus be realistic starting in 2015.

Projects of Common interest (PCi)the european Infrastructure package (eIp) entered into force in June 2013. the corresponding eu regulation describes the european timetable for completing strategic projects in the area of energy networks and energy storage by 2020 and provides, among other things, for an accelera-tion of the approval processes and new financing instru-ments for important line projects.

In october 2013, the european Commission published a list of 250 projects (around 140 projects in the area of electricity transmission and storage) that they defined as “projects of Common european Interest”. Seven ApG master plan projects were elevated to the level of “projects of Common Interest” by the eu Commission.

MAnAGeMent rePort

ABoUt US

Austrian power Grid AG (ApG) operates the Austrian transmission grid, which is part of the trans-european transmission grid of the Regional Group Continental europe (RGCe) of the european network of transmission System operators for electricity (entSo-e).

As the control area manager for Austria, ApG is respon-sible for ensuring a stable balance between generation and utilisation at all times.

With a route length of approximately 3,500 kilometres and just under 6,800 kilometres of connected lines as well as 62 substations and switching systems, ApG’s grid is the backbone of Austria’s power supply. It ensures the cross-regional exchange of electricity both inside and out-side of Austria between energy providers and consumers while guaranteeing a stable supply to the distribution grids.

eneRgY MARket enViRonMent

electricity price trendprices on the electricity futures markets declined in 2013 as they had done previously in financial year 2012. The average price of a base front-year product on the european energy exchange (eeX) in leipzig in 2012 was €49.30/MWh. In 2013, the average price was €39.07/MWh1). the main driver of this price trend was the strong and steady expansion in the area of renewable energy, in particular in Germany. the occasionally sharp volatility on the futures markets, which was primarily influenced by political deci-sions regarding the european emission trading scheme, was striking. The discussion of an artificial, temporary shortage of CO2 certificates (“backloading”) played a major role in price fluctuations over the course of 2013. As a result of the low prices of emission rights, many older coal-fired power plants are currently profitable and thus forcing more modern gas power plants out of the market.

the increasing expansion of renewable energy in Germany described previously can also be clearly seen in the hourly spot price profiles. The typical hourly spot price profile changed to the effect that prices drop dramatically around mid-day in particular when generation from photovoltaic systems is high. In 2013, generation values from solar plants in excess of 20 GW were not uncommon. In order to accommodate the changes in the operating environment as a result of the energy transition, the eeX will offer phelix Sun peak Futures in the near future. According to the eeX, this new futures product is primarily intended to cover the hours of strong sunlight (from 10am to 4pm).

opening of the balancing energy market – technical and economic optimisationApG is currently working intensively in inter-control area cooperations to expand the balancing energy market and utilise synergy effects when balancing energy is requested. The first such cooperation began on 14 May 2013 through the Imbalance netting Cooperation (InC) with the Sloveniantransmission operator eleS. A portion of the balancing reserves is released for the sake of grid security with the Imbalance netting Cooperation by means of technical optimisation of the automated requests for secondary balancing energy. this optimisation should lead to a reduc-tion in the cost basis in connection with the clearing and settlement process.

Furthermore, the mutual call for tenders for primary bal-ancing with the Swiss transmission operator Swissgrid began on 3 July 2013. the necessary primary balancing energy can be procured over the respective other partner transmission operator through this cross-control area cooperation. Approximately €8m in cost savings were re-alised in the roughly six months of 2013 as a result of this cross-control area cooperation, which corresponds to a projected total of approximately €14m in annual savings.

MAnAGeMent rePort

1) Source: http://www.eex.com/en/market-data

18 19


Abolishment of the tariffs regulationthe System Charges order (Systemnutzungsentgelte-Verordnung, Sne-Vo), formerly the System usage Rates Directive (Systemnutzungstarife-Verordnung, Snt-Vo), defines the principles for the determination and allocationof costs, the tariff criteria as well as the tariffs for the fees to be levied for the use of the network. the directive is issued every year by the energy Control Commission.

the Austrian Constitutional Court (VfGH) cancelled the Snt-Vos for 2009, 2010 and 2011 in their entirety (VfGH decision dated 27 September 2011, V 59/9). the effects of the present case were extended to all related and known procedures at the VfGH, even if the individual regulations had not yet been submitted in detail before the Court.

the majority of ApG’s pending court proceedings with respect to the system usage rates for pumped storage power plants, grid loss fees and fees for system services are affected. Following the Constitutional Court’s decision, the proceedings were resumed and continued.

new proceedings with respect to the system charges for pumped storage power plants, grid loss fees and fees for system services were initiated or existing proceedings were expanded also with respect to the System Charges orders (Sne-Vo 2012 and 2013).

The VfGH has confirmed that the system charges for pumped storage power plants (VfGH decision dated 12 March 2012, V 63/2012) and the grid loss fee (VfGH decision dated 12 october 2012, V 22/2012) conform to the law.

the System Charges order (Sne-Vo 2012) has now been cancelled by the VfGH (VfGH decision dated 12 December 2013, V 48/2013 and V 57/2013). At the same time, the challenged provisions of Sne-Vo 2013 were not cancelled with reference to the supplementary definition of the term “outage reserve” as a part of sec-ondary control in Federal legal Gazette (Bundesgesetz-blatt, BGBl) part I no. 174/2013.

RegULAtoRY FRAMewoRk

tariff review 2013 and new system charges starting 2014the following key points were established during the 2013 tariff review:

→ As a rule, capital return set at 6.42% before taxes until 2017

→prepayment of capital costs for the investments of the approved network development plan similar to the method used in prior years

the System Charges order 2014 (Sne-Vo 2014) was pub-lished on 20 December 2013.

the tariff basis for ApG’s gross and net tariffs is reduced by 15% to €124.4m, among other things, as a result of the cost-saving consideration of international sales. the overall tariff basis (including level 3, the loss fees and system service) decreased by 8.5% to €263.0m. the fees for pumped storage remain the same. usage fees will be levied starting in 2014 – similar to pumped storage power plants –for the procurement of energy from the grid to be used as negative balancing energy.

the fees were reduced by 8.9% for system services and by an average of 9.5% for grid losses (level 1 and level 2) as a result of higher generation volumes (in particular due to the good water supply) in the previous year. the differ-ences between the actual procurement costs in 2014 are being rolled up over the regulatory account – similar to the volume differences with respect to the system usage fees – and deducted from the tariffs for 2016.

MAnAGeMent rePort

renewable energy and green electricity2)

ApG renders services in the area of forecasting as well as timetable and meter data management for oeMAG (Green electricity Settlement Agency Austria). As in the previous year, these services were also successfully provided in 2013. However, the enormous increase in the number of plants in the eco-balance group during the past year was a special challenge.

As a result of the massive increase in the number of photovoltaic systems, the number of subsidised plants in this segment rose by 4,747 to 15,809. this corresponds to an increase in capacity of approximately 148 MWp. thus, a total of around 320 MWp in photovoltaic capacity was installed in the Austrian eco-balance group by the end of the year. the wind power segment also expanded strongly once again with 62 new plants and a total of approximately 248 MW in new capacity. the eco-balance group’s total wind power capacity as of the end of the year amounted to 1,556 MW. In the small-scale hydropower segment, 86 power plants were added to the eco-balance group. this corresponds to an increase in capacity of around 72 MW. In contrast, the number of biomass plants decreased slightly. In total, the eco-balance group’s installed capacity increased from 2,183 MW (13,514 meter points) in 2012 to 2,651 MW (18,404 meter points) in 2013.

the green electricity boom correspondingly impacted the energy volumes processed by ApG in and on behalf of oeMAG For instance, approximately 7,164 GWh was allocated to electricity traders in ApG’s control area over the eco-balance group in 2013. this corresponds to a year-on-year increase of 16.2%.

LegAL FRAMewoRk

Approval processRegulation (eu) 347/2013 of the european parliament and of the Council dated 17 April 2013 on the guidelines for the trans-european energy infrastructure had the effect of realigning eu infrastructure policy in the area of electricity. this also entails changes to the Austrian approval regime. The regulation particularly addresses the identification of infrastructure projects of Common european Interest (pCI) for the realisation of primary european infrastructure corridors. on 15 october 2013, the european Commission approved a union list of key infrastructure projects that– organised into 12 regional groups – also includes seven ApG projects. An accelerated approval process with less administrative red tape, including priority status at the national level, is to be provided for these pCI projects. every member state appointed a national authority by 16 november 2013 that is responsible for simplifying and coordinating the approval process for projects of Common Interest.

In the area of environmental impact assessment (eIA), a recommendation by the european Commission for a com-prehensive revision of environmental Impact Assessment Directive 2011/92/eu has been subject to the intra-com-munity legislative process since 26 october 2012. As soon as the final directive enters into force on the basis of the current compromise proposal, the european member states have two years to implement it in national law. until then, approval applications can be submitted under the legal regime of the old directive governing the environmen-tal impact assessment. Insofar, no serious deterioration is expected from a current perspective based on the expec-ted final version, since the Austrian legislative body already acted ambitiously in implementing the environmental Impact Assessment Act 2000 (umweltvertraglichkeitsprü-fungsgesetz 2000, uVp-G 2000) at the time.

MAnAGeMent rePort

2) Source: Data based on the ApG-uBM Green electricity Group’s statistics as well as oeMAG's switchover and master data information.

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SeCURitY oF SUppLY AnD gRiD opeRAtionS

transported energy volumesIn 2013, a total of 43,137 GWh was transported from ApG’s 220/380 kV grid. thus, approximately two thirds of the energy consumed in Austria was transported over ApG’s 220/380 kV grid (around 68,000 GWh; peak load of approx-imately 10,000 MW).

Congestion managementIn 2013, ApG did not record any supply interruptions and fulfilled its legal responsibility for ensuring secure grid operations without limitations, despite critical grid situa-tions and outages.

While converting the Danube line (220 kV line from the St. peter substation to the Dürnrohr substation) to 380 kV, arrangements for a thermal power plant to stand by had to be made for the first time in 2013 in order to ensure the possibility of redispatch measures (increase/decrease in thermal generation) in north-eastern Austria. On 29 May 2013, there was a fire in the St. Peter substa-tion in upper Austria due to a design fault in the switching system of the new 380/220 kV transformer. nevertheless, grid security was ensured as a result of comprehensive technical grid measures as well as the rapid construction of a provisional system and the approval process for the 380 kV Danube line under high-voltage route regulations was completed on 25 September 2013.

On 2 June 2013, a mudslide destroyed five towers of the 380 kV tauern-lienz line. the supply of electricity was ensured by implementing comprehensive technical grid measures and the rapid construction of a single-system one-and-a-half-kilometre-long provisional 380 kV line. the line was put into operation on 24 october 2013.

In the second half of 2013, extensive and costly power plant measures (redispatch) had to be implemented in order to compensate the impermissibly high loads on the 380 kV line between Slavetice (Czech Republic) and Dürn-rohr. this overloading was caused by high green electricity exports from Germany as well as high electricity imports in Austria as a result of low thermal and hydraulic generation.

Grid loss procurementAs the central purchaser, ApG procures the necessary grid loss energy for a majority of the grid operators in Austria. thus, the Company acts as a wholesale buyer on the euro-pean electricity market and conducts its own market-based purchasing activities to cover grid losses. ApG uses daily spot trades to compensate daily remaining shortfalls on the electricity markets. the participating grid operators are supplied daily with the energy volumes needed to cover their grid losses by means of a central ApG balancing ener-gy management system.

In 2013, ApG was responsible for procuring approximate-ly 2.85 tWh or around 82% of the total amount of grid loss energy needed in Austria (3.5 tWh). thanks to ApG’s successful acquisition efforts, this share will rise to 92% in 2014. the number of bidders participating in calls for tenders was increased to 15 in 2013. overall, a decrease in Austrian prices compared to 2012 was observed, similar to wholesale prices on the German exchange eeX.

In addition, ApG’s trading system was adapted to further improve ApG’s position as a service provider for the Austri-an electricity market (for example, downloading outcomes in the call for tender).

geneRAL eConoMiC FRAMewoRk

Cancellation of snt-Vo 2009–2011 and sne-Vo 2012As a result of the cancellation of Snt-Vos 2009–2011 (VfGH decision dated 27 September 2011, V 59/9) and Sne-Vo 2012 (VfGH decision dated 12 December 2013, V 48/2013 and V 57/2013) by the Constitutional Court, provisions were recognised in the amount of the fees paid by the claimants for the impending tariff repayments to producers. Since ApG assumes that the defaults will be settled via the regulatory account, a corresponding asset was recognised in return.

Confirmation of SNE-VO 2013Due to the confirmation of provisions of SNE-VO 2013 (VfGH decision dated 12 December 2013, V 48/2013 and –V 57/2013) by the Constitutional Court, there was no need to recognise provisions for 2013.

regulatory accountThe balance sheet presentation from 2012 was confirmed during the first review of the regulatory account this year by e-Control. the amounts were not changed. In order to increase transparency and leave a clearer audit trail, the presentation and logic of the balance sheet were adjusted as requested.

section 59(8) elwoG 2010 In accordance with Section 59(8) of the 2010 Austrian electricity Industry and organisation Act (elektrizitäts-wirtschafts- und -organisationsgesetz, elWoG), the time lag with respect to the payment of compensation in the form of system usage fees can be recognised as an asset or a liability. According to the current view of regulation, the time lag in payment applies for all cost items in which the regulator has generally recognised the cost pools in its notice. In the past, when the amounts for these cost items fell short of the value indicated in the notice, the differencewas recognised as a liability. Based on Section 59(8), there is now an option to recognise an asset if the amounts exceed the value indicated in the notice. As a result, the costs for congestion management, ex ante and the net-work Development plan (nDp) were accounted for in 2013.

Alpine insolvency Alpine Bau GmbH filed its insolvency petition on 19 June 2013 and therefore also its withdrawal from all contracts formed in accordance with Section 21 of the Insolvency Code (Insolvenzordnung, Inso).

With respect to ApG, this related in particular to the contracts for two large-scale projects: the 220 kV plant conversion at the Bisamberg substation as well as the 110 kV plant and operating facilities at St. Andrä.

In order to determine the percentage of completion with regard to the insolvent estate, all ongoing projects were evaluated with representatives of the receiver. As a result of the insolvency, ApG had to award new contracts in accordance with the Austrian Federal public procurement law (Bundesvergabegesetz, BVergG), i.e. calls for tenders to at least three bidders with contract values > €100,000.

Furthermore, as a consequence of this insolvency, ApG recorded a significant expense for overhauling and re-awarding the projects, among other things; moreover, current guarantees for completed projects had become irrelevant.

implementation of electronic awarding of contractsAwarding contracts electronically follows the goal of increasing sustainability and transparency in the handling of award processes and, in accordance with an eu directive for public and sector contractors, must be implemented by 2016. ApG already addressed this issue back in 2012 and successfully implemented “vemap” – an electronic platform for public tender – following an intensive evalua-tion and selection process in 2013. Since then, the plat-form has been further developed and augmented with additional functions (e.g. contract placement assistant, supplier management) on an ongoing basis.

sePA conversionRegulation (eu) no. 260/2012 of the european parlia-ment dated 30 March 2012 created the framework for the conversion to the Single euro payments Area (SepA), which must be implemented by 1 August 2014 according to the eu Commission. ApG successfully completed its conver-sion to SEPA payments in the first quarter of 2013.

MAnAGeMent rePortMAnAGeMent rePort

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network development planthe network Development plan (nDp) is a legal obligation (in accordance with Section 37 elWoG 2010) and is based on the long-term strategic budgets under the Master plan 2030, detailed grid analyses as well as the grid access and/or grid connection projects requested at ApG.

ApG informs all market participants about which long-term important transmission infrastructures must be expanded in ApG’s grid by means of the nDp. the nDp includes a list of investments that have already been decided upon as well as those projects that must be implemented within the next three years. In addition, the plans to further expand the network for the next ten years are also presented in the nDp.

the nDp 2013 covers the planning period from 2014 to 2023 and was approved by the Austrian regulatory au-thority e-Control Austria via notice in December 2013. It includes a total of 46 network expansion projects, whereby ten new projects were submitted for approval compared to the previous year’s nDp. necessary steps according to this plan include:

→ around 260 km in new power lines and approximately 330 km in upgrades for existing power lines (e.g. setting up new systems, voltage conversion), as well as

→ new construction and expansion of around 25 substations with approximately 190 new switching fields and around 50 new transformers.

salzburg line projectThe 380 kV Salzburg line is of significant importance for the support of the regional distribution networks in Salz-burg and upper Austria. It is an important section of the Austrian 380 kV security ring and enables further expan-sion of electricity generation from renewable energy in Austria. the project is being funded by the european union as a ten-e project (trans-european energy networks). the significance for Europe was substantiated by its inclusion in the list of european pCI projects.

The first section of the 380 kV Salzburg line (from the St. peter network node to the Salzburg substation), which has been operating at 220 kV in its first phase of expansion since March 2011, is currently being monitored as per no-tification of administrative requirements in the operating phase.

For the second section of the 380 kV Salzburg line (from the St. peter network node to the tauern network node), the environmental impact statement (eIA) was submitted – together with the approval application and the technical submission documents – in September 2012 to the two responsible environmental authorities in upper Austria and Salzburg. the administrative order requiring the disclosure of project documents was published on 28 February 2013 in Salzburg and on 15 March 2013 in upper Austria. this also marked the official start of the environmental impact assessment (eIA) with public participation.

the public disclosure of project documents by the authori-ties in all local municipalities in Salzburg and upper Austria as well as the time limit for submitting objections com-prised the period from 20 March 2013 to 15 May 2013. In total, approximately 1,200 individual objections were sub-mitted, whereby a majority of them (approximately 90%) consisted of boilerplate objections. of the 41 municipalities in the project area, 14 municipalities submitted a state-ment against the project.

By the end of 2013, the environmental impact reports were prepared by the administrative experts and comments on all objections had been written. on 8 January 2014, the eIA report was published by order. According to the order, the oral eIA hearing will take place from 2 to 5 June 2014.

Due to the anticipated duration of this process, construc-tion will begin at the end of 2015 at the earliest. Commis-sioning is therefore scheduled for 2019.

Procurement of balancing energyAfter the complete opening of the national balancing ener-gy market in 2012, ApG procured balancing energy valued at €171.9m in 2013. this total can be broken down into costs for primary balancing (€13.4m), secondary balancing (€124.4m), outage reserve (€14.3m), tertiary balancing (€15.0m) and unwanted exchange (€4.8m).

ApG implements numerous measures in order to counter the trend of rising costs in the area of balancing energy. For instance, two additional market participants were attracted for the calls for tenders for primary and secondary balanc-ing. In addition, the prequalifying conditions for all types of balancing energy are currently being adjusted in order to facilitate the participation of small energy producers, pools of reserve units and industrial plants on the balancing ener-gy market as well as to anticipate the future requirements of the new european network codes.

parallel to this, ApG is working to introduce an electronic call-off for tertiary balancing energy (based on the model of the merit order list server in Germany) in order to reduce the minimum bid size in the calls for tenders to 5 MW (cur-rently at least 10 MW for the initial bid and at least 25 MW for every subsequent bid).

the implementation of the aforementioned measures is currently planned for the first half of 2014.

gRiD SeCURitY AnD DeVeLopMent

the current changes in the european electricity system are presenting grid operations with new challenges and have far-reaching consequences on the grid in combination with the increasingly dynamic electricity market. the accelera-ted expansion of renewable energy is leading to geographic shifts in generation and significantly more volatile feed-in behaviour. Increasingly shorter lead times are being de-manded on the electricity exchanges by the market players for the marketing of electricity in order to facilitate the marketing of fluctuations in generation on short notice. As a result, a sharp increase in intraday trading can be observed.

High feed-in levels of renewable energy in Germany (wind power and photovoltaic) and the export of surplus electri-city are leading to frequent bottlenecks and critical situ-ations at certain weak points in the Austrian transmission grid. the rising transport volumes compared to the past and the heightened dynamic of electricity flows show that secure grid operations are becoming increasingly challeng-ing.

APG Master Plan 2030the Master plan 2030 published in november 2013 repre-sents the foundation for the strategic long-term develop-ment of ApG’s grid. Building on future energy market trend scenarios, it defines the steps necessary to expand the ApG grid to its target for 2030.

Comprehensive expert analyses (national and internation-al) formed the basis for determining the master scenariosexamined as well as a broadly conceived participation process in whose scope all relevant energy market players were included. the resilience of the Austrian 380 kV secu-rity ring concept was confirmed in all analysed scenarios. the Master plan 2030 (available in German only) can be downloaded online at: http://www.apg.at/en/grid/grid%20expansion/masterplan


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overall investment volumesApG’s total planned investment volume, including substa-tions and operating investments based on the nDp 2013 amounts to approximately €2.6bn for the next ten years. As studies conducted at the Graz university of technology and the Austrian Institute of Industrial Science (IWI) show that ApG’s projects will add up to 70% in value for the Austrian economy, the implementation of ApG’s projects will not only function as a significant economic stimulus, but also permanently secure Austria as a location for industry. According to the aforementioned studies, around 13,000 jobs will be created in Austria for every one billion euros invested.

inteRnAtionAL

inter tso Compensation (itC)ItC is a compensation mechanism for the system usage costs associated with the cross-border supply of electrical energy. In accordance with the european Commission ItC guidelines for equalising international electricity trans-port costs, a multilateral agreement was formed between the european tSos within entSo-e. In accordance with the guidelines, the total amount for this european cost equalisation is capped at €100m. the Agency for the Co-operation of energy Regulators (ACeR) began monitoring the volume of this common fund in 2012 and presented a report thereon in 2013. For the time being, the €100m cap could be maintained, among other things, supported by a study presented by ApG and Swissgrid. In its report, ACeR announced a future “major” solution to include rules for capacity auctions (in particular, methods of load flow-based allocation of capacities), compensation for the increased occurrence of “loop flows” and new regulations for trans-european energy infrastructure. the time frame for the renewed evaluation and/or development of new rules was set as 2013 to the end of 2015.

Allocation management CAo, CAsC, regionsRegional initiatives (regional markets) were established in 2006 as an interim step with the goal of completing the eu internal market by 2014. Multiple neighbouring coun-tries and their regulatory agencies are working together on this with the eu Commission, enterprises and other interest groups in order to eliminate any possible hurdles in the electricity sector. Based on eu Regulation 714/2009, Austria is a member of two regions, Central eastern europe (Cee) and Central Southern europe (CSe), and was also added as an official member to the Central Western Europe (CWe) market region in 2011 by the responsible ministers. ApG is involved as an observer in South east europe (See). the aim of the third package for the eu internal market is to create a uniform electricity market with a european price-coupling mechanism by 2014, successively inte-grating the current regional markets into a single electricity market. ApG is located at the interface between western (CWe), eastern (Cee) and southern (CSe) europe, therefore providing an important bridging function in the merging of these markets.

In the CEE region, the Central Auction Office (CAO), in which ApG holds a 12.5% interest, has been set up to coordinate the allocation of bottlenecked marginal capacities. this auction house centrally administers all of the borders in the CEE area and brought a load flow-based auction system to market in mid-2011. ApG has occupied the position of the CAo’s Supervisory Board Chairman for the last four years.

Regarding the CSe region, the auction house for the CWe region, the Capacity Allocation Service Company (CASC), also took over cross-border capacity auctions for the CSe area in 2011, including the Austrian-Swiss border. this auction house, in which ApG holds 8.33% of shares, is therefore the first inter-regional auction house for trans-mission capacities in europe.

Back in 2012, the decision was taken to speed up the merger of the two auction houses CASC and CAo. In 2013, participating tSos appointed a Steering Committee, which is now to work out a concrete procedure for the merger.

Line project Germanythe massive expansion of renewable energy in northern Germany has led to an increase in energy exchange be-tween Austria and Germany. this results in – also due to interaction with Austrian pumped storage power plants – increasing grid loads in the 220 kV interconnecting lines in St. peter (German-Austrian border). the transmission capacities of the 220 kV power lines are occasionally heavi-ly overloaded and require frequent market limitations and costly congestion management. Due to the foreseeable further expansion of renewable energy in europe, further increases in energy flows along the connecting lines to Germany can also be expected.

the German grid operator tennet tSo and ApG are there-fore planning to expand a newly constructed 380 kV re-placement line from the St. peter network node to the next high-capacity German network nodes in Isar and ottenhofen. this should result in an additional high-capacity 380 kV network connection between Austria and Germany. ApG is responsible for the roughly 3-kilometre-long line section between St. peter and the national border. the new line should accelerate the common German-Austrian market area and enable the interaction of renewable energy with the pumped storage power plants in Austria.

Due to the positive effects for the integration of renewableson the one hand and market integration on the other (key word: “market coupling”), the project is being funded by the eu as a ten-e project and is once again on the list of pCI projects.

integration of wind power in eastern Austriathere are currently expansion plans for wind farms with around 2,000 MW of feed-in capacity for lower Austria, Burgenland and the metropolitan area of Vienna. A total increase in wind power capacity of around 3,500 MW can be expected by 2017. Since these capacities (in particular in Burgenland and in Weinviertel) exceed local consumption requirements, in some cases many times over, the gener-ated electrical energy must be fed into the ApG grid.

As a result of the local concentration, new feed-in points into ApG’s 380 kV grid and 380/110 kV transfer points to the distribution networks must be built.

extensive expansion of the existing 380 kV Zurndorf, Sa-rasdorf, Bisamberg and Dürnrohr substations are planned over the next four years. In addition, a 220/110 kV feed-in point for the lower Austrian distribution network operator netz niederösterreich is to be constructed in northern Weinviertel by 2017.

other projects and operating investmentsIn addition to the aforementioned large-scale projects and grid expansion investments, general age-related renewals as well as the reconstruction of switching systems and/or 220 kV power lines will be necessary in the coming years due to rising standards (e.g. for the short-circuit resistance of switching systems) as well as due to age. In prepara-tion of necessary general renewals, reconstruction – for instance of the 220 kV St. peter-Hausruck-ernsthofen line – is being examined and prepared in a pilot project in 2013 and 2014.

In addition, upgrades are planned for multiple lines, with the goal of ensuring the continuous load-handling capacity of the cables and the required ground clearance, also at high ambient temperatures in summer (upgrading to 80°C catenaries). operational security and the n-1 reserves can thereby be increased and the scope of congestion man-agement decreased. the 80°C upgrades are also a require-ment for the application of thermal rating on certain lines carrying a high load. ‘thermal rating’ is understood as overhead line operations that are adapted to environment-al conditions (temperature, wind, sunshine, etc.), facilitat-ing a more efficient use of existing load capacities under favourable conditions (cool and windy).


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sustainability at APGApG is responsible for the safe supply of electricity to all of Austria, both today and in future. ApG approaches this challenge proactively and conscientiously with a view to sustainability. In its mission statement, ApG expresses its commitment to the principles of sustainable trade. the classic three pillars of sustainability (economy, ecology and social equity) form the framework of ApG’s initiatives. the foundation is a corporate policy that respects economic requirements as well as ecological limits and strives for social equilibrium.

In 2011, APG prepared its first own sustainability report. In addition to a general presentation of the Company and project reports, this publication offers the public a com-prehensive collection of data and figures for the areas of the economy, the environment, and social equity for the 2011 reporting period. In 2013, an update of the sustain-ability data for 2012 was published on the ApG website that only applies in conjunction with this report for 2011. this data update for 2012 also includes the environmental statement audited in accordance with eMAS III regulation.

peRSonneL

the skills and dedication of our employees contribute significantly to the further development of APG. Given rising demands, targeted human resource development programmes are intended to ensure the qualification of ApG’s personnel.

Consistent and prudent personnel planning that provides clarity over future staffing levels and requirements is needed to cope with the effects of the demographic shift. this generates the personnel management basis for goal-oriented options that can provide incentives for decision scenarios.

Standardised salary systems for all employees ensure transparent performance-based remuneration. A Com-pany-wide definition of uniformly structured job descrip-tions in connection with adopting a standard personnel structure model for each organisational unit ensures the effectiveness and consistency of daily personnel manage-ment activities.

In implementing the new provisions of the equal treatment Act (Gleichbehandlungsgesetz, GlbG), an income report was prepared for the first time in 2013 and provided to the governing bodies of the staff.

New target group-specific measures were implemen-ted and existing cooperations were intensified in order to further increase ApG’s prominence as an employer. In 2013, an apprentice video was produced that is to con-tribute to covering future demand for skilled workers trained in the Company’s own apprentice programme.

2013 was a successful year with respect to the further increase in the share of women in ApG’s staff. the share of women among newly recruited employees increased by one-third as a result of targeted measures in the past fiscal year.

our advanced training and further education programmes focus on technical training – in particular in the field of grid operations. the high quality of grid operations can be ensured through specific training and workshops. The maintenance and improvement of our employees’ foreign language skills form another area of concentration due to increasing integration with european partner companies.

tso security CooperationtSo Security Cooperation (tSC) is a cooperation among 12 european network operators. they have set a goal of further increasing the security of the high-voltage power grids in Central europe.

The TSC Joint Office in Munich began its activities in 2013. Its tasks include coordinating the results of the joint day-ahead and intraday planning of grid operations for all 12 tSC partner tSos, demand analysis and further develop-ment of the tSC It environment as well as the management of tSC software and system suppliers. eight tSC agents work in 24-hour shifts together with the tSos’ operational planners to coordinate the joint grid model and the results of grid security analyses and measures – including power plant dispatch – in a continuous process. tSC analysts conduct ex-post results analyses and plan and/or develop future solutions for an efficient operational planning pro-cess. After the first experiences in 2013, the TSC partner tSos decided in november 2013 to organise the Joint Office as a limited liability company (GmbH) in 2014.

After the employee training and technical preparations were completed, grid operation planning also commenced at the ApG control centre on 30 September 2013 in 24-hourshifts seven days a week. In light of the further increasing volatility and momentum of generation from renewable sources of energy and the electricity market in europe, the tSC intraday process is already indispensable for secure grid operations.

In 2013, preparations were undertaken at all national border transfer points for the implementation of D-2 capacity calculation (two days in advance), whereby tSC on the one hand will take over this function from the Central Allocation Office and on the other will assume coordination with the neighbouring tSos in France, the united Kingdom and Italy. the development of a common tSC application for the shutdown planning of all tSC tSos coordinated for the medium-term is an important project that was pre-pared in 2013.

non-FinAnCiAL peRFoRMAnCe inDiCAtoRS

integrated Management system (iMs)All of APG’s sites and lines are certified under the EMAS regulation (european environmental management system), ISo 14001 (international environmental management system), ISo 9001 (international quality management sys-tem), oHSAS 18001 (safety and health management sys-tem) and ISo 27001 (information security management). the advantages of using an IMS, and having it assessed externally each year, are the continued improvements in all areas, increases in performance and efficiency, greater legal security, checking for the application of regulations, and the optimisation that accompanies external auditors.

the IMS synergies were also optimally utilised in 2013 through the shared audit of all standards used at ApG. A team of two auditors from lloyd’s Register Quality Assurance (LRQA) and the auditor from CIS – Certification & Information Security Services GmbH spent a week to-gether auditing ApG’s management system for compliance with standard requirements.

During this first surveillance audit in the certification cycle, the Integrated Management System (IMS) was found to be stable. tasks and responsibilities are regulated; processesand procedures are well documented. the continuous im-provement was demonstrated, among other things, with the help of the implementation of measures from pre-vious audits, the grid analysis team’s activities and the IMS programme, which is explained in the sustainability report. The certificates have thus been extended for the environ-mental, quality, safety and health management systems as well as the information security management system.


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FinAnCiAL peRFoRMAnCe inDiCAtoRS

results of operations

ApG’s revenue climbed year-on-year by €37.3m to €573.7m. provisions recognised in 2012 for the possible cancellation of the System Charges order (Sne-Vo) 2012 were remeasured and largely reversed. As a result of the previous VfGH decisions confirming the grid loss fee and system usage fee for pumped storage power plants as well as due to the confirmation of the fee for system services based on the Sne-Vo 2013, no additional provisions will be necessary. the aforementioned reversal of provisions and the increased proceeds from system services based on higher rates were the main reasons for the increase in revenue.

In the purchase of electricity, the increased expenses for balancing energy and congestion management were par-tially offset by the decrease in expenses for system loss procurement.

personnel expenses decreased year-on-year by €2.3m to €54.5m. this decrease can mainly be attributed to a lower expense for social capital. Actuarial losses based on the decrease in interest rates in social capital from 4% to 3.5% in 2013 were less than the negative effects in social capital in 2012.

other operating expenses in 2013 rose from €62.8m by €4.8m to €67.6m. this increase can be explained by the subsequent allocation of tariff provisions for auction revenues as a result of the decrease in the discount rate as well as the additional expense for extraordinary losses in 2013.

earnings before interest and taxes (eBIt) stood at €68.7m, rising year-on-year by €25.7m. the primary driver was the increase in revenue, which was partially offset by the increase in expenses for balancing energy and other operating expenses.

Interest expense decreased by €4.9m as a result of the decrease in the interest rate. For this reason and also because of the increase in eBIt, the result from ordinary activities rose by €30.6m to €50.3m. net income for the financial year amounted to €37.7m and was thus €22.1m higher than in the previous year.

Net retained profits amounted to €10.4m, which was appropriated for the distribution of dividends in 2014.

€k 2013 2012

Revenue 573,713.6 536,430.1

Earnings before interest and taxes (EBIT)

68,683.2 43,017.7

Result from ordinary activities 50,272.3 19,683.0

Net income for the financial year 37,661.8 15,570.5

Net retained profits 10,374.5 0.0

Average capital employed 1,089,183.0 1,068,600.4

Return on equity (ROE) 16.1% 6.6%

Return on investment (ROI) 4.8% 3.5%

ROCE 4.7% 3.0%

Return on sales (ROS) 12.0% 8.0%

ReSeARCH, innoVAtion AnD tHe enViRonMent

In 2013, ApG worked on a total of 28 research projects – some of them lasting several years. Seven of them were concluded in 2013. ApG’s focus on research and innovation lies above all in application-oriented research in which technical solutions for specific issues are examined in cooperation with industry and science.

the development of energy market scenarios that analyse the effects of new energy systems on the grid infrastruc-ture and the market represented one area of concentra-tion. these form, among other things, the basis for ApG’s grid planning (master plan, network development plan) and support the planning of the electricity transmission system at the european level. the topic Smart Grid was also the subject of ApG’s 2013 research projects. part of the Active Demand Side Management (ADSM) project was the development of a new photovoltaic forecast tool, which is already being used on a daily basis in timetable manage-ment for the eco-balance group.

With respect to system management, ApG views itself as being increasingly confronted with critical load flow situa-tions and reaching the limits of stability in its grid. there-fore, new monitoring systems such as thermal rating, iced line monitoring or wide area measurement are constantly being developed – and in some cases are already in produc-tive operation – in order to maintain grid security.

the maintenance of lines is also being presented with new challenges. the long-term planning of the safe shutdown of lines for impending inspections is becoming ever more difficult. Therefore, APG has also used an UAV (Unmanned Aerial Vehicle / multicopter) since August 2012. the device takes aerial photographs of overhead lines and substa-tions with an integrated camera, which aid in assessing the condition of the equipment without the necessity of a shutdown.

the technological bases for international cooperations in the area of grid security are also being worked on. For instance, innovative tools such as the Real-time Awareness and Alarming System (RAAS) and the Common tool for Data exchange and Security Assessments (CtDS), which is used by all tSC members, are the foundation of the tSo security cooperation (further information can be found in ApG’s research report at www.apg.at).


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CASH FLow StAteMent1)

€k note 2013 2012

Net income for the financial year 37,661.8 15,570.5

Amortisation of intangible assets and depreciation of fixed assets 70,369.5 66,041.1

Result from the disposal of fixed assets –227.0 –254.8

Change in long-term provisions and deferred tax liabilities –170,048.0 44,067.9

Change in long-term liabilities 72,693.9 0

Change in long-term other receivables and assets and deferred tax assets 41,645.5 0

Income from the reversal of building-cost contributions and government grants –11,325.5 1,870.6

Other non-cash income and expenses –7,222.4 –927.8

Change in inventories –62.2 –63.8

Change in trade receivables and other receivables2) –30,252.7 –118,884.9

Change in trade payables and other liabilities3) 56,603.6 6,743.0

Change in current provisions and current tax liabilities 38,087.5 114,908.2

Net cash flow from operating activities (1) 97,924.0 129,070.0

Investments in tangible and intangible assets –119,852.7 –142,001.7

Disposals of tangible and intangible assets 2,194.7 2,855.2

Investments in long-term financial assets 0.0 –14.0

Disposal of long-term financial assets 615.0 846.4

Net cash flow from investing activities (2) –117,043.0 –138,314.0

Building-cost contributions and government grants received 22,875.2 22,117.0

Disposals of building-cost contributions and government grants 2,825.2 –6.3

Proceeds/disbursements from increases/decreases in Group financing –20,902.8 –20,902.8

Proceeds/disbursements from the increase/decrease in Group clearing balances 21,352.4 10,256.2

Profit transferred 0.0 –471.8

Net cash flow from financing activities (3) 26,150.0 10,992.3

Change in liquid funds 7,031.0 1,748.3

Liquid funds as at 1 Jan 4,362.3 2,614.0

Liquid funds as at 31 Dec 11,393.3 4,362.3

1) The cash flow statement was revised in 2013 and previous year's figures have been adjusted.2) including prepaid expenses 3) including deferred income

net assets

A net increase of €32.0m to €1,187.1m is to be recorded in fixed assets, since investments in tangible and intangible assets in the amount of €104.9m exceeded depreciation and amortisation significantly.

Receivables decreased from €257.5m to €248.0m – mainly due to the reversal of assets recognised to cover underfunding with respect to grid losses and secondary balancing as well as the contra account for Sne-Vo provisions.

Liabilities to affiliated companies increased by €6.6m from €562.9m to €569.6m. trade payables rose by €5.3m to €14.5m. liabilities increased by a total of €126.7m to €709.0m.

Current liabilities rose by €349.4m to €635.0m. Due to the change in financing as a result of the unbundling, a long-term loan in the amount of €250.0m was temporarily moved to current liabilities. Current liabilities increased by €85.0m as a result of the change in tariff provisions from long-term to current and the recognition of current tariff provisions.

Financial position

The financial result increased by €4.1m year-on-year to €–14.6m. this can be attributed in particular to a decrease in interest rates in 2013.

the decrease in net gearing from 295.8% to 220.1% can be explained mainly by the decrease in interest-bearing provisions.

Cash flows for the financial year are presented in a sepa-rate list.

In 2013, the fictitious debt repayment period pursuant to Section 24 of the Company Reorganisation Act (unterneh-mensreorganisationsgesetz, uRG) represents a separate line item, because it is negative. the reason lies in the change in accounting treatment of the regulatory tariff provisions recognised in 2012. they were reported as long-term provisions until 2012, and as a current interest-free liability starting in 2013. newly allocated tariff provisions are recognised as current interest-free provisions for lia-bilities. In addition, the provisions for repayment pursuant to the System usage Rates Directive (Snt-Vo) and System Charges orders (Sne-Vo) are expected to be utilised in 2014; therefore, the recognised provisions are reported as current in the 2013 annual financial statements. Thus, the key figure for 2013 does not provide any meaningful information.

This cash outflow resulted in a negative cash flow from ordinary activities.

€k 2013 2012

Fixed assets 1,187,113.2 1,155,153.9

Current assets 260,060.3 262,989.8

Net working capital –522,147.1 –210,036.9

Net debt1) 772,044.7 925,245.1

Equity 312,967.8 274,284.7

Current liabilities 635,031.9 285,541.3

Current assets 112,884.8 76,023.6

Equity as a percentage of assets 24.0% 21.8%

€k 2013 2012

Net cash flow from operating activities

97,924.0 129,070.04

Net cash flow from investing activities

–117,043.0 –138,314.0

Net cash flow from financing activities

26,150.0 10,992.3

Financial result –14,575.4 –18,642.4

Gearing 220.1% 295.8%

Fictitious debt repayment period n/a 8.5 years

1) The key figure was revised and previous year’s figures have been adjusted.


32 33


oppoRtUnitY AnD RiSk MAnAgeMent

Risks and opportunities are part of any business venture. The early identification and professional evaluation of these risks and opportunities are therefore integral com-ponents of planning, management and all decision-making processes. Risk is understood to be a potential negative deviation from planned corporate goals. In the evaluationand management of risk, the associated opportunities are also taken into consideration.

ApG’s opportunity and risk management is oriented to the framework of the Committee of Sponsoring organizations of the treadway Commission – enterprise Risk Manage-ment (CoSo-eRM). the CoSo-eRM framework consists of the components internal environment, objective setting, risk management process, monitoring activities (internal control system), information, communication and moni-toring.

ApG’s risk management process comprises the following individual steps: identification, analysis, measurement, management (implementation of measures) and reporting. updates and/or remeasurement as well as reporting are carried out on a quarterly basis.

ApG focuses particularly on major risks such as outages in the transmission grid and the communication and control systems, delays in the 380 kV grid expansion as well as environmental catastrophes that result in destruction of parts of the system. Financial and operational risks as well as compliance and legal risks, regulatory risks and risks in the area of energy procurement and the market are subject to monitoring and measurement.

the following measures have been taken to minimise risks:

system and operational risks→ Advancing the 380 kV grid expansion→ Design of a disaster fallback plan and ongoing training for employees in the area of outages and crisis situations→ tSC-tSo Security Cooperation

Project risks→ Creation of a network development plan for a period of ten years→ Implementation of project management→ operation of anti-claim management

Financial risks→ Development of a long-term financing strategy → liquidity and cash management planning→ price risk: the rates are set in the respectively applicable Sne-Vo based on the annual cost review by the regulator→ Currency risk: no exposure due to uniform currency → Default risk: allowances are recognised for defaulted payments→liquidity risk: in accordance with the interface agreement, VeRBunD has committed to providing ApG with sufficient capital

risks from hedging transactions→ electricity forwards of up to two years into the future are purchased in order to procure grid losses. there is no price risk due to the procurement process coordinated with the regulatory agency (eCA). ApG takes advantage of the “own use” rule.

(1) Disclosures regarding net cash flow from operating activitiesNet cash flow from operational activities is calculated using an indirect method and fell year-on-year by €31.1m to €97.9m.

The significant shifts in line items result from the change in the accounting treatment of regulatory tariff provisions. previously, they have been recognised in the year of alloca-tion as long-term discounted provisions. As of 2013, new items are recognised as current undiscounted provisions and reclassified as a liability in the following year when confirmed in the regulator’s notice.

Furthermore, the calculation of the regulatory account in accordance with Section 50(1) and (7) elWoG 2010 was first approved by decision in 2013. As a result of the regulator’s presentation of a net amount, the accounting treatment of this line item changed, which has led to shifts between recognition as an asset or liability.

long-term provisions decreased by €106.1m in partic-ular as a result of the change in accounting treatment and calculations. Furthermore, provisions for disputed system services related to 2012 (Sne-Vo) were reduced by €65.0m to €4.0m, since in fact only two complaints were filed despite all withholding payments.

long-term other liabilities increased by €72.7m primarily due to the aforementioned reasons.

Current other liabilities increased by €45.6m. In addition, a regulatory liability in the amount of €4.5m for the idle capacity of investments has already been recognised for 2014.

other receivables increased to €40.0m as a result of the possibility under Section 59(8) elWoG 2010 of recognising additional regulatory assets. this item was removed from the changes in trade receivables and shown separately as its own item in order to increase the clarity of presentation. In addition, deferred tax assets increased by €1.6m.

non-cash contributions to building costs increased largely due to the reversal of revenue accruals.

the increase in receivables from deliveries and services as well as other receivables can be attributed mainly to the €24.6m increase in regulatory assets.

other liabilities increased by €43.3m as a result of the change in the accounting treatment of tariff provisions. liabilities to Group entities increased by €10.3m as a result of the greater need for secondary balancing and congestion management.

Current provisions increased by €32.1m as a result of the current recognition of the regulatory account in accor-dance with Section 50(1) elWoG 2010.

(2) Disclosures regarding net cash flow from investing activitiesThe outflow of funds from investing activities for tangible and intangible assets amounted to €119.9m. the main investments related to the conversion of the Danube line to 380 kV operation, the construction of the third and fourth systems of the 380 kV Dürnrohr-Sarasdorf line, the in-vestment for the Zell-Ziller substation and the preliminary work on the construction of the 380 kV tauern-pongau-Salzach-St. peter line.

under consideration of the disposal of intangible assets and tangible fixed assets, the area of investing activities required €117.0m in cash funds.

(3) Disclosures regarding net cash flow from financing activities€25.7m in building-cost contributions and government grants was received, which related in particular to the Zurndorf and Greuth substations as well as to the addition-al Sarasdorf transformer.

Additional resource needs as a result of investing activities were covered with short-term Group financing.


34 35


→ The national approval regimes must reflect the increasing momentum of the european electricity market. Approval processes for central line construction projects must be simplified and thereby accelerated, because only then can the rapid conversion of the european generation structure and sharp increase in the generation of electricity from renewable energy sources be accomplished.

no further litigation related to the Sne-Vo is foreseen for 2014 at this time. Barring any further charges as a result of legal disputes, the revenue and earnings situation appears to be stable for 2014.

RepoRt on BRAnCH opeRAtionS

There were no subsidiaries in financial year 2013.

eVentS AFteR tHe BALAnCe SHeet DAte

there have been no events since the balance sheet date that require disclosure in the management report.

Vienna, 30 January 2014the executive Board

Dr. Ulrike Baumgartner-Gabitzer Mag. Thomas Karall DI Mag.(FH) Gerhard Christiner

Market risks→ Implementation of strict risk management in energy procurement→ Assessment of creditworthiness, awarding of credit limits and monitoring of compliance→ Development of suppliers and increase in bidder diversity

regulatory risks→ Cost management to ensure cost acceptance→ Appointment of independent experts for audit certificates → Cooperation with national and international interest groups, associations and authorities

Compliance risks→ Monitoring of legal developments → Implementation of a code of conduct, clear rules and process descriptions→ employee training is conducted, particularly with respect to anti-corruption and the Independent transmission operator (Ito) concept

Legal risks→ Cooperation with national and international interest groups, associations and authorities → legal advice from external experts

Personnel risks→ training of executives and employees→ ensuring succession planning and employee development→ promotion of health and safety programmes

oUtLook 2014

the long-term and sustainable conversion of the european electricity supply system to renewable energy sources will continue to be the determining factor in the europeanelectricity market in 2014 and beyond. In its energy Road-map 2050, the European Commission has reaffirmed that it will continue to stand by its ambitious climate protection goals and thus by its goal of expanding renewable energy. As a transmission system operator, ApG will therefore have to continue to deal with a rapidly changing generation structure, which will entail a complete change in load flows due to geographic shifts in generation and increasing feed-in volatility.

Another driver of these trends is the growing momentum of the european electricity market. the volume of cross-border electricity trading will not only continue to increase, electricity trading transactions are becoming increasingly short-term and require more and more flexibility on the part of grid operators.

With respect to the necessary changes in operating condi-tions, the tasks remain the same:

→ the harmonisation of the legal environment at the european level must be further advanced. the european grid operators have already made good progress in this regard with the current version of the network codes.

→ the necessary changes in the area of grid infrastructure require the tariff models to be adapted so as to reflect the changing demands on transmission operators.


36 37


eqUitY AnD LiABiLitieS note 2013 in € 2012 in €k

A. equitY

I. Subscribed capital (7) 70,000,000 70,000.0

II. Capital reserves (8) 15,383,543 15,383.5

III. Revenue reserves (9) 217,209,769 188,901.2

IV. Net retained profits (10) 10,374,503 0.0

312,967,815 274,284.7

B. untAXed reserVes (11)

1. Valuation reserve due to impairment losses 50,022,877 50,977.8

2. Other untaxed reserves 289,764 356.2

50,312,641 51,334.0

C. ProVisions (12)

1. Provisions for severance pay 21,525,114 22,636.0

2. Provisions for pensions and similar obligations 65,862,722 63,393.3

3. Other provisions 213,781,435 365,681.2

301,169,271 451,710.5

d. LiABiLities (13)

1. Liabilities to banks 0 519.2

2. Payments received on account of orders 340,000 880.0

3. Trade payables 14,532,059 9,197.1

4. Liabilities to affiliated companies 569,558,819 562,944.9

5. Other liabilities of which taxes €5,259,778.54 (Previous year: €7,551.6k) of which relating to social security and similar obligations €792,663.16 (Previous year: €756.2k)

124,615,391 8,833.4

709,046,269 582,374.6

e. deFerred inCoMe (14)

1. Contributions to building costs 71,955,157 61,534.8

2. Other 17,663,891 14,676.0

89,619,048 76,210.8

1,463,115,043 1,435,914.6

FinAnCiAL stAteMents

ASSetS note 2013 in € 2012 in €k

A. FiXed Assets

I. Intangible fixed assets (1) 7,287,100 7,816.9

II. Tangible fixed assets (2) 1,168,411,854 1,135,375.2

III. Long-term financial assets (3) 11,414,211 11,961.8

1,187,113,165 1,155,153.9

B. Current Assets

I. Inventories (4)

1. Consumables and operating supplies 713,998 651.8

713,998 651.8

II. Receivables and other assets (5)

1. Trade receivables 59,604,223 57,156.8

2. Receivables from affiliated companies 3,255,959 1,523.6

3. Receivables from other long-term investees and investors

12,892,840 11,154.1

4. Other receivables and assets 172,199,989 187,622.0

247,953,011 257,456.5

III. Cash-in-hand and bank balances 11,393,253 4,881.5

11,393,253 4,881.5

C. PrePAid eXPenses (6)

1. Deferred tax assets 15,938,416 17,553.5

2. Other 3,200 217.4

15,941,616 17,770.9

1,463,115,043 1,435,914.6

BALAnCe SHeet AS At 31 DeC 2013


38 39


note 2013 in € 2012 in €k

10. Income from long-term equity investments, of which from affiliates €374,502.55 (previous year: €548.7k)

670,257 846.8

11. Income from other securities and long-term loans 50 20.2

12. Other interest and similar income, of which from affiliates €10,708.81 (previous year: €25.0k)

3,097,889 3,816.5

13. Income from the disposal of long-term financial assets 67,382 14.6

14. Expenses from long-term financial assets and securities classified as current assets

0 –5.8

15. Interest and similar expenses, of which from affiliates €9,446,064.04 (previous year: €13,569.5k)

–18,410,942 –23,334.7

16. FINaNCIaL resULT (sUBToTaL FroM LINes 10 To 14) (20) –14,575,364 –18,642.4

17. ReSULt FRoM oRDinARY ACtiVitieS 50,272,252 19,682.9

18. Taxes on income (21) –12,610,497 –4,112.5

19. net inCoMe FoR tHe FinAnCiAL YeAR 37,661,755 15,570.4

20. Reversal of untaxed reserves 1,021,347 983.4

21. Allocation to revenue reserves –28,308,599 –16,082.0

22. Profit transferred under contractual obligations 0 –471.8

23. Net retained profits 10,374,503 0.0

note 2013 in € 2012 in €k

1. Revenue (15) 573,713,604 536,430.1

2. Other own work capitalised 9,094,502 8,408.7

3. Other operating income (16)

a. Income from disposal and reversal of write-downs of fixed assets with the exception of long-term financial assets

281,034 290.8

b. Income from reversal of provisions 1,391,165 -85.0

c. Miscellaneous 7,866,783 5,042.9

9,538,982 5,248.7

4. Gross proFIT (sUBToTaL FroM LINes 1 To 3) 592,347,088 550,087.5

5. Expenditures for electricity and other purchased services and production services

–334,991,834 –326,116.4

6. Personnel expenses (17)

a. Wages –332,891 –303.8

b. Salaries –37,911,888 –36,557.2

c. Expenses for severance payments –1,287,585 –2,670.2

d. Cost of old age pensions –5,733,278 –8,592.2

e. Expenses for social security contributions as required by law as well as income-based charges and mandatory contributions

–8,687,493 –8,154.8

f. Other social expenses –558,616 –567.9

–54,511,751 –56,846.1

7. Depreciation and amortisation (18) –70,369,471 –66,041.1

8. Other operating expenses (19)

a. Taxes not included under line 19 –227,142 –463.4

b. Miscellaneous –67,399,274 –62,295.2

–67,626,416 –62,758.6

9. operaTING proFITs (sUBToTaL FroM LINes 4 To 8) 64,847,616 38,325.3

inCoMe StAteMent FoR FinAnCiAL YeAR 2013



40 41


€k BALAnCe 1 JAn 2013

ADDitionS DiSpoSALS ReCLASSiFiCAtionS BALAnCe 31 DeC 2013

CUMULAtiVe DepReCi-Ation, AMoRtiSAtion

AnD wRite-DownS

ReSiDUALCARRYing AMoUnt

31 DeC 2013

ReSiDUAL CARRYing AMoUnt

31 DeC 2012

DepReCiAtion AnD AMoRtiSAtion in

FinAnCiAL YeAR 2013

i. intAnGiBLe FiXed Assets

1. Concessions, industrial property rights, electricity purchase rights, user fees and similar rights and benefits as well as licences derived therefrom

30,706.0 2,831.2 2,314.5 0.0 31,222.8 23,935.7 7,287.1 7,816.9 3,280.0

30,706.0 2,831.2 2,314.5 0.0 31,222.8 23,935.7 7,287.1 7,816.9 3,280.0

ii. tAnGiBLe FiXed Assets

1. Land, land rights and buildings, including buildings on third-party land

a. with residential buildings 265.0 0.0 0.0 0.0 265.0 265.0 0.0 0.0 0.0

b. with plant facilities and other structures 231,437.9 4,483.7 1,289.5 11,366.0 245,998.1 131,833.6 114,164.6 105,067.5 5,561.3

c. undeveloped land 545.8 0.6 0.0 429.1 975.5 0.0 975.5 545.8 0.0

2. Machinery 4,272.7 7.3 284.5 0.0 3,995.6 1,211.2 2,784.3 3,154.7 183.4

3. Electrical installations 1,020,272.7 37,164.3 18,030.7 34,787.2 1,074,193.3 773,706.7 300,486.7 262,261.4 33,403.5

4. Power lines 1,195,429.2 8,244.8 107.4 4,111.6 1,207,678.3 575,512.5 632,165.9 644,648.7 24,735.2

5. Other equipment, operating and office equipment 30,828.4 2,671.1 1,469.2 25.5 32,055.8 20,601.2 11,454.5 12,098.9 3,206.0

6. Assets under construction, projects and prepayments 107,598.1 49,508.5 6.8 -50,719.4 106,380.4 0.0 106,380.4 107,598.1 0.0

2,590,649.9 102,080.2 21,188.0 0.0 2,671,542.1 1,503,130.2 1,168,411.9 1,135,375.2 67,089.4

tAngiBLe AnD intAngiBLe FiXeD ASSetS 2,621,355.9 104,911.4 23,502.5 0.0 2,702,764.9 1,527,065.9 1,175,699.0 1,143,192.0 70,369.5

iii. LonG-terM FinAnCiAL Assets

1. Shares in affiliated companies 127.2 0.0 0.0 0.0 127.2 0.0 127.2 127.2 0.0

2. Other long-term equity investments 1,857.2 0.0 0.0 0.0 1,857.2 0.0 1,857.2 1,857.2 0.0

3. Loans to other long-term investees and investors 15.0 0.0 15.0 0.0 0.0 0.0 0.0 15.0 0.0

4. Long-term securities 15,763.5 0.0 523.8 0.0 15,239.7 5,839.0 9,400.7 9,908.3 0.0

5. Other loans 54.1 0.0 25.0 0.0 29.1 0.0 29.1 54.1 0.0

17,817.1 0.0 563.8 0.0 17,253.2 5,839.0 11,414.2 11,961.8 0.0

FiXeD ASSetS 2,639,173.0 104,911.4 24,066.3 0.0 2,720,018.1 1,532,904.9 1,187,113.2 1,155,153.9 70,369.5

StAteMent oF CHAngeS in FiXeD ASSetS


The value of the properties as at 31 DEC 2013 €27.112,2k 31 DEC 2012 €26.379,6k


42 43


ReMAining teRM AS At 31 DeC 2012

€k Up to 1 YeAR MoRe tHAn 1 YeAR MoRe tHAn 5 YeARS totAL Up to 1 YeAR MoRe tHAn 1 YeAR MoRe tHAn 5 YeARS totAL

LoAns

1. Loans to other long-term investees and investors 0.0 0.0 0.0 0.0 15.0 0.0 0.0 15.0

2. Other loans 5.1 24.0 0.0 29.1 15.6 38.5 0.0 54.1

5.1 24.0 0.0 29.1 30.6 38.5 0.0 69.1

reCeiVABLes And otHer Assets

1. Trade receivables 59,604.2 0.0 0.0 59,604.2 57,156.8 0.0 0.0 57,156.8

2. Receivables from affiliated companies 3,256.0 0.0 0.0 3,256.0 1,523.6 0.0 0.0 1,523.6

3. Receivables from other long-term investees and investors 12,892.8 0.0 0.0 12,892.8 11,154.1 0.0 0.0 11,154.1

4. Other receivables and assets 25,016.2 129,740.8 17,443.0 172,200.0 407.7 154,940.0 32,274.3 187,622.0

100,769.2 129,740.8 17,443.0 247,953.0 70,242.2 154,940.0 32,274.3 257,456.5

LiABiLities

1. Liabilities to banks 0.0 0.0 0.0 0.0 519.2 0.0 0.0 519.2

2. Payments received on account of orders 340.0 0.0 0.0 340.0 880.0 0.0 0.0 880.0

3. Trade payables 13,044.4 1,452.8 34.9 14,532.1 7,964.6 1,136.2 96.3 9,197.1

4. Liabilities to affiliated companies 348,954.7 83,611.1 136,993.1 569,558.8 71,437.9 333,611.1 157,895.8 562,944.9

5. Liabilities to other long-term investees and investors 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

6. Other liabilities 51,723.6 39,909.2 32,982.7 124,615.4 8,380.4 453.1 0.0 8,833.4

414,062.6 124,973.0 170,010.7 709,046.3 89,182.0 335,200.4 157,992.2 582,374.6

MAtURitY SCHeDULe AS At 31 DeC 2013


ReMAining teRM AS At 31 DeC 2013


44 45


detAiLs on equitY inVestMents in ACCordAnCe witH seCtion 238 Line 2 uGB

€k RegiSteReD oFFiCe

SHARe oF CApitALin % AS At

31 DeC 2013

MoSt ReCentAnnUAL FinAnCiAL

StAteMentS

( + )( - )

net inCoMe/LoSS FoR tHe

FinAnCiAL YeAR

eqUitY1)

AFFiLiAteD CoMpAnieSConSoLiDAteD

VERBUND Umwelttechnik GmbH (VUM) Klagenfurt 100.00 2013 + 374.5 583.1

otHeR Long-teRM eqUitY inVeStMentS

OeMAG Abwicklungsstelle für Ökostrom AG Vienna 24.40 2012 + 421.1 5,466.9

1) Equity as defined under Section 224 (3) letter A of the Austrian Commercial Code (UGB)

StAteMent oF CHAngeS in UntAXeD ReSeRVeS

€k BALAnCe1 JAn 2013

ADDition ReCLASSiFiCAtion

ReVeRSAL DiSpoSAL

BALAnCe 31 DeC 2013

VALuAtion reserVe due to iMPAirMent Losses

1. ACCeLerAted dePreCiAtion in ACC. witH seCtion 7A oF tHe inCoMe tAX ACt (estG) 1988

1.1 Structures 6,360.0 9.0 141.1 6,227.9

1.2 Machinery 485.8 0.0 0.0 485.8

1.3 Electrical installations 20,483.2 256.9 134.1 20,606.0

1.4 Power lines 16,259.8 0.0 0.0 16,259.8

1.5 Operating and office equipment 686.7 0.0 91.1 595.6

1.6 Assets under construction 980.5 -436.4 0.0 544.0

45,256.0 -170.5 366.4 44,719.1

2. ACCeLerAted dePreCiAtion in ACC. witH seCtions 8 And 122 estG 1972

2.1 Power lines 2,574.9 0.0 536.7 2,038.2

2,574.9 0.0 536.7 2,038.2

3. trAnsFer oF Hidden reserVes in ACCordAnCe witH seCtion 12 estG

3.1 Land, land rights and buildings, including buildings on third-party land

1,388.2 0.0 2.5 1,385.7

3.2 Electrical installations 0.0 8.8 0.9 7.9

3.3 Power lines 1,756.2 161.7 48.5 1,869.4

3.4 Operating and office equipment 2.5 0.0 0.0 2.5

3,146.9 170.5 51.9 3,265.5

50,977.8 0.0 955.0 50,022.9

otHer untAXed reserVes

1. inVestMent-reLAted eXeMPtion in ACCordAnCe witH seCtion 10 estG

1996 75.2 0.0 54.3 20.9

1997 139.0 0.0 8.1 130.9

1998 61.9 0.0 0.3 61.6

1999 37.9 0.0 0.3 37.6

2000 42.2 0.0 3.4 38.8

356.1 0.0 66.4 289.8

UntAXeD ReSeRVeS 51,334.0 0.0 1,021.3 50,312.6


46 47


deferred incomeIf tax relief is expected in subsequent years, the option to recognise deferred tax assets is applied, whereby the deferred taxes attributable to the group members1) based on tax allocation are presented under the current result on their balance sheet. these deferred items result from differences between cumulative results under commercial law and tax law for items with expenses that will only be offsettable for tax purposes in future periods.

Deferred income includes building cost contributions and government grants which are depreciated based on the useful life of tangible assets.

ProvisionsProvisions reflect all identifiable risks attributable to a past financial year and include all amounts necessary based on prudent business judgement.

provisions for severance payments are allocated in the fullactuarial amount based on the projected unit credit meth-od typical of international accounting standards. the ac-cumulation period with respect to provisions for severance payments is 25 years. employees whose contracts began after 31 December 2002 are not entitled to a direct claim against their employer for a statutory severance payment. For these employment contracts, the employer monthly pays 1.53% of the salary into an employee pension fund in which the premiums are deposited in an account of the employee. The provisions for severance payments reflect regulations that go beyond the statutory claims specified under the collective agreement for energy providers.

ApG is obligated based on labour-management agreements and contracts to pay pension benefits to employees when they retire if certain requirements are met. Dedicated pension fund assets of BAV pensionskassen AG are avail-able to cover some of these defined benefit obligations. Theprovisions determined in accordance with the projected unit credit method typical for international accounting standards are presented as net of pension plan assets. the employer is obligated to provide additional funding to the extent that these defined benefit obligations are to be fulfilled by BAV Pensionskassen AG.

provisions for current pensions, entitlements to pensions and similar obligations are determined based on the pro-jected unit credit method. In accordance with the KFS/Rl 2/3b opinion of the expert Committee for Commercial law and Auditing of the Austrian Chamber of public Accoun-tants and tax Advisors (Fachsenat für unternehmensrecht und Revision der Kammer der Wirtschaftstreuhänder) is-sued on 9 July 2012, application of the corridor method for financial years beginning on or after 1 January 2013 is no longer permitted. ApG already made use of the option for early application in 2012. All cumulative actuarial profits and losses were reported in the income statement at the time of the change in accounting policy.

As part of the change in accounting policy, the presenta-tion of interest expenses from personnel-related obliga-tions was also changed in the income statement. Interest expense has been presented under financial results since 2012 in accordance with international standards and not under personnel expenses as before.

“AVÖ 2008-p – Actuarial Assumptions for pension Insur-ance – pagler & pagler” were applied as a calculatory basis.

1) See taxes on income

i. ACCoUnting poLiCieS

Preliminary remarksRounding differences may occur when adding rounded amounts and percentages due to the use of automated calculation systems.

Fixed assetsAs a rule, depreciable fixed assets are measured at cost less depreciation and amortisation. the catalogue of uni-form depreciation rates applied by Austrian power Grid AG (ApG) essentially comprises the following rates of depre-ciation:

tangible and intangible assets used for more than six months during the financial year are depreciated at the full annual rate; those used for less than six months are depre-ciated at one-half the annual rate.

purchased intangible assets are measured at cost and – if amortisable – amortised based on the typical useful life.

In addition to direct costs, an appropriate amount of indirect material and labour costs is capitalised in the production cost of internally generated assets. ApG has chosen not to apply the optional method of measurement with respect to the inclusion of social security expenses, severance payments and contributions to employee pen-sion funds defined under Section 203 (3) of the Austrian Commercial Code (unternehmensgesetzbuch, uGB) as well as with respect to the capitalisation of borrowing costs in accordance with Section 203(4) uGB. low-value assets are fully written off in the year of acquisition in accordance with Section 226(3) uGB.

Financial assets are recognised at cost or the lower fair value; long-term securities are measured at cost or the most recent carrying amount in the event of tempo-rary impairment. loans bearing interest are recognised at nominal value. Receivables with a remaining term of more than one year are reported as loans under long-term financial assets.

Current assetsInventories of consumables and operating supplies are measured at cost in accordance with the strict principle of lower of cost or market. A permanent inventory is kept of stored supplies and spare parts measured based on the moving average price method. Inventory risks arising from the storage period and reduced utility are taken into account through appropriate write-downs in value.

Receivables and other assets are measured at nominal value, unless a lower amount is to be recognised in the event of identifiable specific risks.

notes to tHe FinAnCiAL stAteMents

DepReCiAtion RAte in %

USeFUL LiFein YeARS

intAnGiBLe FiXed Assets

Rights to telecommunication facilities

10 10

Rights to software products 25 4

Other rights 5 20

BuiLdinGs

Residential and office buildings 2 and 3 33.3 and 50

Plant buildings 3 33.3

teCHniCAL equiPMent And MACHinerY

Machines 4 and 5 20 and 25

Electrical installations 5 20

Telecommunication facilities 10 10

Power lines 2 50

oFFiCe And PLAnt equiPMent 10-25 4-10


48 49


€k 2013 2012

Consumables and operating supplies 714.0 651.8

In accordance with Section 223(7) uGB, items in the bal-ance sheet and income statement that did not show an amount in either the financial year or the previous year are not stated. In accordance with Section 223(4) uGB, the descriptions of the items were shortened or expanded to reflect their actual contents if it was deemed to increasethe clarity and understanding of the annual financial state-ments.

As a general rule, if the presentation was changed in com-parison to the previous year, the amounts reported for the previous year were adjusted in accordance with Section 223(2) uGB.

notes regarding assets

A. Fixed assetsFor more details, see the separate Statement of changes in fixed assets.

(1) I. Intangible fixed assetsthe residual carrying amount of the usage rights acquired from affiliated companies amounts to €658.0k (previous year: €677.5k).

(2) II. Tangible fixed assetsThe capitalised borrowing costs related to the financing of tangible fixed assets in the years up to and including 1989 for the transmission systems contributed by VeRBunD AG in 1999 amounted to €8,330.2k on the balance sheet date (previous year: €8,884.3k).

(3) III. Long-term financial assetsthe disclosures required under Section 238 line 2 uGB are presented in a separate schedule entitled “Disclosures re-garding other long-term equity investments in accordance with Section 238 line 2 uGB”.

the development and structure of other long-term equity investments and long-term securities can be found in the separate appendix entitled “Statement of changes in fixed assets”.

Long-term securitiesthese primarily consist of shares in Austrian investment funds and loans.

the reversals of write-downs omitted in accordance with Section 208(3) uGB amount to €2,249.0k (previous year: €1,614.1k), since the increase in value is not expected to be permanent.

B.Current assets(4) I. Inventories

(5) II. receivables and other assetsFor more details, see the separate Maturity schedule.

Regulatory assets include losses as defined under Sec-tion 50(5) elWoG (cancellation of the System usage Rates Directive (Systemnutzungstarife-Verordnung, Snt-Vo) for 2009–2011 and the pending cancellation of the System Charges order (Systemnutzungsentgelte-Verordnung, SNE-VO) for 2012), unusual additional costs as defined under Section 50(2) ElWOG and additional costs as defined under Section 50(7) elWoG that are taken into account in future tariffs.

other receivables include €171,755.1k (previous year: €187,292.9k) in income that will not be realised until after the balance sheet date in accordance with Section 225(3) uGB.

€k 2013 2012

otHer reCeiVABLes And Assets

Regulatory assets 171,271.2 187,214.2

Personnel accounting 163.9 170.3

Security deposits 156.0 85.8

Investment grants 91.8 0.0

Local tax offices 23.6 33.3

Relating to social security 9.5 39.6

Other 484.0 78.8

172,200.0 187,622.0

Calculations as at 31 December 2013 and 2012 are based on the following assumptions:

the interest rate applied for the expected return on plan assets was the same as the one used to calculate the associated provisions.

Liabilitiesliabilities are recognised at their settlement amount based on the principle of prudence.

taxes on incomeAustrian power Grid AG is not a taxable entity in terms of corporate income tax due to its position as the parent entity of the VeRBunD AG corporate group (Group and tax Allocation Agreement dated 21 September 2005).

the members of the group are charged attributable amounts for corporate income tax incurred by them in the form of positive tax allocations amounting to 25% of their attributable positive income; if a loss is generated, they are credited 25% of their attributable negative income in the form of negative tax allocations. the offsetting of allocated tax amounts shifts the tax expense within the group parent's income statement.

the tax offsets with the group members are only adjusted to reflect subsequent differences if they are material.

regulatory assets and liabilitiesIf grid tariffs are set by a regulator on the basis of esti-mates of costs and/or revenues and lower or higher costs and/or revenues in previous periods are taken into account when determining future tariffs, the grid operator is enti-tled to charge the grid users higher tariffs as compensa-tion for higher costs and/or lower revenues in future years. the grid operator is also obligated to refund the grid users for lower costs and/or higher revenues by charging lower tariffs. Such entitlements and obligations are referred to as regulatory assets and liabilities. ApG is subject to such a regulated tariff structure by energie-Control Austria. the special provisions governing the accounting treatment set forth in the Austrian electricity Industry and organisation Act (elektrizitätswirtschafts- und organisationsgesetz, elWoG) are applied.

ii. noteS to tHe BALAnCe SHeet AnD inCoMe StAteMent

General informationIndividual line items are consolidated in the balance sheet and income statement in the interest of clarity. these line items are explained separately in the notes to the financial statements. the individual line items of the balance sheet and income statement are presented in accordance with VeRBunD's Group-wide requirements with respect to form and contents.

2013 2012

interest rAte

Pensions and similar obligations 3.50% 4.00%

Severance pay 3.50% 4.00%

trend

Increases in pension 2.25% 2.25%

Increases in salary 2.75% 2.75%

Contribution payments for obligations similar to pensions – old contracts

7.00% 7.00%

Contribution payments for obligations similar to pensions – new contracts

4.00% 4.00%

Turnover 0.00–4.00% 0.00–4.00%

Retirement age for women 56.5–65 56.5–65

Retirement age for men 61.5–65 61.5–65

Expected long-term return on fund assets

4.00% 4.00%



50 51


the provision for grid billing results from the obligation to repay revenue received in the amount of €113,196.4k due to the cancellation of the Snt-Vo for 2009–2011, pro-visions for the impending cancellation of the Sne-Vo for 2012 and unbilled services for grid billing in the amount of €21,460.4k.

Regulatory provisions relate to additional revenue, which will be reflected in the determination of future tariffs. In 2013, the accounting treatment of regulatory liabili-ties was changed. Additional revenue is recognised as a current, non-interest bearing provision for liabilities in the year it is received (previously treated as long-term, interest-bearing other provisions). Additional revenue received is reclassified as a regulatory other liability when it is identified in an official notice.

(13) D. LiabilitiesFor more details, see the separate Maturity schedule.

Liabilities to affiliated companies include €549,611.1k in financial liabilities (previous year: €551,919.3k) and €19,947.7k in other liabilities (previous year: €11,025.5k).

Regulatory liabilities include additional revenue received in 2012 that was identified in 2013 in an official notice from energie-Control Austria. Due to the aforementioned change in accounting treatment, they were removed from other provisions and reclassified under Other liabilities.

other liabilities include €120,518.3k (previous year: €2,394.3k) that will be realised after the balance sheet date in accordance with Section 225(6) uGB due to the change in the accounting treatment of tariff provisions in 2013.

(14) e. Deferred income

Building cost contributions relate to third-party contribu-tions associated with the use of individual facilities. Deferred income includes €7,969.1k (previous year: €7,105.6k) related to affiliated companies.

€k 2013 2012

BuiLdinG Cost ContriButions (FinAnCiAL ContriButions)

72,312.8 61,534.8

otHer

Investment grants 14,673.3 13,544.1

Prepayments for auctions 1,568.0 0.0

Prepayments for grid use 871.4 925.3

Advance lease payment for fixed telecom assets of affiliated companies

193.5 206.7

89,619.0 76,210.9

€k 2013 2012

otHer PersonneL-reLAted ProVisions

Unused holidays 3,270.9 3,188.8

Premiums 2,879.2 2,497.7

Holiday bonus 1,576.2 1,485.0

Early pensions, voluntary severance payments and partial retirement

356.5 1,502.2

Time credits 354.3 377.1

Expected losses from personnel secondment

0 747.4

Other 212.6 147.1

8,649.7 9,945.3

deLiVeries And serViCes not Yet BiLLed

27,650.3 48,750.4

213,781.4 365,681.1

€k 2013 2012

otHer LiABiLities

Regulatory liabilities 118,356.8 0.0

From taxes 5,259.8 7,551.6

Relating to social security 792.7 756.2

Personnel accounting 18.4 16.5

Other 187.7 509.1

124,615.4 8,833.4

(6) C. Deferred income

Deferred tax assets are the result of differences between the cumulative financial and taxable results with respect to line items that can only be used to offset future taxable income. the calculation was based on a tax rate of 25%.

notes regarding equity and liabilities

A. equity(7) I. subscribed capitalthe subscribed capital equals €70,000.0k and is divided into 70,000,000 registered no-par value shares.

(8) II. Capital reservesCapital reserves comprise €7,000.0k in restricted capital reserves (previous year: €7,000.0k) and €8,383.5k in unal-located capital reserves (previous year: €8,383.5k).the restricted capital reserves correspond to 10% of sub-scribed capital.

(9) III. revenue reservesRevenue reserves comprise €140,552.5k in distributable reserves (previous year: €112,243.9k) and €76,657.3k in distributable investment-related reserves (previous year: €76,657.3k).

(10) IV. Net retained profitsChanges in net retained profits are shown below:

(11) B. Untaxed reservesFor more details, see the separate Statement of changes in untaxed reserves.

(12) C. provisions1. provisions for severance pay

In accordance with Section 14 of the Austrian Income tax Act (einkommensteuergesetz, eStG), the provision was transferred tax-exempt to a reserve qualifying as taxed (Section 124 b line 68 eStG) in 2002.

2. provisions for pensions and similar obligations

the actuarial losses that had accumulated for pensions and similar obligations by 1 January 2012 were recognised in the full amount of €3,079.6k under personnel expenses.

3. other provisions


€k 2013 2012

Deferred tax assets 15,938.4 17,553.5

Other 3.2 217.5

15,941.6 17,771.0

€k 2013 2012

Premium reserve based on actuarial calculations

21,525.1 22,636.0

Taxed portion of provisions 21,525.1 22,636.0

€k 2013 2012

Pension provisions 65,862.7 63,393.3

of which obligations similar to pensions

27,020.9 25,551.5

€k

As at 31 DEC 2012 0,0

Net income for the financial year before changes in reserves

37,661.8

Change in revenue reserves –28,308.6

Change in untaxed reserves 1,021.3

AS At 31 DeC 2013 10,374.5

€k 2013 2012

otHer ProVisions reLAted to tHe eLeCtriCitY/Grid Business

Grid billing 134,656.8 189,117.6

Regulatory reserves 42,824.6 117,867.8

177,481.4 306,985.4


52 53


(16) 3. other operating income

(17) 6. personnel expenses

€k 2013 2012

a) Income from the disposal of fixed assets with the exception of long-term financial assets

281.0 290.8

b) Income from reversal of provisions 1,391.2 –85.0

c) Miscellaneous 7,866.8 5,042.9

9,539.0 5,248.7

€k 2013 2012

a) Wages 332.9 303.8

b) Salaries 37,911.9 36,557.2

38,244.8 36,861.0

c) Expenses for severance payments and payments to employee pension funds

Severance payments 3,073.6 1,907.3

Change in provisions for severance payments -1,997.8 510.5

Premium payments to employee pension fund 211.8 179.8

Expense (income) from absorption (transfer) Group 0.0 72.6

1,287.6 2,670.2

d) Cost of old age pensions

Early retirement, pension payments and similar obligations 5,180.2 5,837.3

Changes to provisions for pensions and similar obligations 56.6 709.5

Expense (income) from absorption (transfer) Group 0.0 7.2

Change in provisions for early retirement and partial retirement –1,182.6 –1,364.2

Pension fund contributions (including additional funding obligations) 1,679.1 3,402.4

5,733.3 8,592.2

e) Expenses for social security contributions as required by law as well as income-based charges and mandatory contributions

8,687.5 8,154.7

f) Other social expenses 558.6 567.9

54,511.8 56,846.0

€k 2013 2012

ReVenUe FRoM gRiD tARiFF SettLeMent

Austria Energy providers 412,835.2 346,997.0

Industrial customers 16,585.2 14,394.3

Other customers 64,851.3 55,505.6

494,271.7 416,896.9

EU Energy providers 3,439.2 3,486.2


12,193.3 20,313.8

Other countries Other customers 1,016.8 160.5

1,016.8 160.5

507,481.9 437,371.2

USAge AnD MAnAgeMent FeeS

Austria Energy providers 1,178.0 6,468.0

Industrial customers 44.2 43.4

Other customers 634.6 581.7

1,856.8 7,093.1

EU Energy providers –3,158.7 785.9


56,340.4 86,852.3

58,197.2 93,945.4

otHeR ReVenUe 8,034.5 5,113.5

573,713.6 536,430.1

notes to the income statement (15) 1.revenue


negative revenue in the eu arises as a result of auction revenue forwarded to the merchant line.

Other customers in the EU only include the CAO Central Allocation Office in Germany and the Capacity Allocation Service Company in luxembourg, which carry out the auction of marginal capacities for ApG.


54 55


(20) 15. Financial result

(21) 17. Taxes on income

In 2013, €1,021.3k in untaxed reserves were reversed (previous year: €983.4k), thereby increasing taxes on income by €255.3k.

the result from ordinary activities was reduced by €12,610.5k in taxes on income (previous year: €4,112.6k).

iii. otHeR DiSCLoSUReS

1. Total amount of other financial commitments

€k 2013 2012

otHer interest And siMiLAr inCoMe

from affiliated companies 10.7 25.0

interest And siMiLAr eXPenses

from affiliated companies 9,446.1 13,569.5

€k totAL CoMMitMent 2014 2014 - 2018

MAin iteMs

Rent and lease agreements, insurance 1) 10,814.4 52,294.4

Other (insurance, compensations, fees for usage/operational management)

1) 4,069.0 19,633.6

Purchase commitment 105,362.2 82,089.8 105,326.2

Lost energy 184,673.9 128,837.1 184,673.9

Balancing energy 5,805.4 5,805.4 5,805.4

of which to affiliated companies 36,895.2 92,320.6

€k 2013 2012

FroM tHe GrouP PArent

Income tax for the current period 10,995.5 8,459.3

Deferred tax assets 1,615.0 –4,346.7

12,610.5 4,112.6

1) The total commitment cannot be determined because the contractual periods are indefinite.

€k 2013 2012

a) Amortisation of intangible fixed assets and depreciation of tangible fixed assets

Depreciation and amortisation in the financial year 70,366.9 65,921.0

Immediate write-offs of low-value assets in accordance with Section 13 EStG 2.5 120.0

70,369.4 66,041.0

(18) 7. Depreciation and amortisation

(19) 8. other operating expenses


€k 2013 2012

a) Taxes not included in taxes on income 227.1 463.4

227.1 463.4

b) Miscellaneous

Third-party deliveries and services for repair and maintenance 19,836.3 14,616.0

Regulatory costs 12,990.9 12,470.4

Telecommunication and data services 8,710.7 8,712.9

Allocations to other regulatory provisions 4,601.9 1,879.1

Temporary staff and personnel secondment 3,640.8 4,045.5

IT support, electronic data processing 2,567.6 4,337.6

Operating costs for buildings, rent and leases 2,390.0 2,381.8

Travel expenses 1,697.3 1,583.5

Legal, audit and consulting expenses 1,591.7 3,216.7

Advanced training and further education (incl. apprentice training) 938.5 885.9

Write-downs of and valuation allowances on receivables 248.6 228.9

Miscellaneous administrative expenses 86.6 1,049.7

Other expenses 8,098.4 6,887.2

67,399.3 62,295.2

67,626.4 62,758.6


56 57


Austrian power Grid AG is a member of the parent com-pany's corporate group (as defined under Section 9(8) of the Corporate Income tax Act (Körperschaftsteuergesetz, KStG)).

Due to APG's inclusion in the consolidated financial state-ments of VeRBunD AG, Vienna, as well as the correspond-ing disclosure of expenses for the auditor in the aforemen-tioned consolidated financial statements, this information is omitted in these annual financial statements.

The profit-and-loss-transfer agreement formed between VeRBunD AG and Austrian power Grid AG on 20 november 2001 was terminated on 31 December 2013.

The consolidated financial statements are filed with the commercial register of the Vienna Commercial Court.

6. Influence of the 3rd eU Internal energy Market package in austriaVeRBunD has decided to implement the Ito (Independent Transmission Operator) as defined under the 3rd EU In-ternal energy Market package and the eIWoG 2010, which entailed stricter unbundling rules, thereby remaining the owner of ApG.

APG received ITO certification in a notice issued by E-Control Austria (ECA) dated 12 March 2012. The official designation as an independent transmission operator was announced in the Austrian Federal law Gazette (Bundes-gesetzblatt, BGBl) II 134/2012 on 19 April 2012 by the Austrian Federal Minister of economic Affairs, the Family and Youth. In accordance with Section 27(2) line 3 elWoG, the compliance officer began his activities on 1 March 2012.

Business transactions as defined under Section 8(3) elWoG will be carried out in particular with the following companies:

→electricity deliveries VeRBunD Hydro power AG, VeRBunD thermal power GmbH & Co KG, ennskraftwerke Aktiengesellschaft, VeRBunD AG

→ grid services VeRBunD Hydro power AG, VeRBunD thermal power GmbH & Co KG, ennskraftwerke Aktiengesellschaft, Österreichisch-Bayerische Kraftwerke Aktiengesellschaft, Donaukraftwerk Jochenstein Aktiengesellschaft, KelAG-Kärntner elektrizitäts-Aktiengesellschaft, SteWeAG-SteG GmbH, VeRBunD AG

→Telecommunications VeRBunD telekom Service GmbH

→ Managerial services VeRBunD Management Service GmbH, VeRBunD AG

→FinancingVeRBunD Finanzierungsservice GmbH, VeRBunD International Finance GmbH

→engineering pÖYRY energy GmbH

→personnel secondments VeRBunD Management Service GmbH, pÖYRY energy GmbH

Vienna, 30 January 2014

the executive Board

dr. ulrike Baumgartner-Gabitzer di Mag.(FH) Gerhard Christiner Mag. thomas Karall

ApG is obligated to provide additional funding to land owners for a limited period of up to ten years after a power line is placed into operation if a portion of the developable land is rededicated.

As a transmission operator, ApG is obligated under the Austrian electricity Industry and organisation Act (elWoG) of 2010 to ensure the balance between generation and consumption for the purpose of operating a secure system as well as to maintain frequency and voltage. In order to fulfil these duties, Austrian Power Grid AG also purchases grid services in the form of balancing and lost energy from VeRBunD AG, VeRBunD Hydro power AG and VeRBunD trading AG.

A contract has been formed with VeRBunD Management Service GmbH for the billing of services in the areas of It and administrative services. A contract has been formed with VeRBunD-Finanzierungs-service GmbH for the settlement of services relating to the processing of payment transactions and cash manage-ment.

In financial year 2013, all agreements entered into with members of the Supervisory Board or any entities closely associated with individual members of the Supervisory Board were formed at arm's length as defined under Sec-tion 237 line 8b uGB. Services were rendered for various companies of the VeRBunD consolidated group; these contracts were approved by e-Control Austria.

ApG is obligated based on labour-management agreements and contracts to pay pension benefits to employees when they retire if certain requirements are met. the employer is obligated to provide additional funding to the extent that these pension obligations are to be fulfilled by BAV Pensionskassen AG. Due to the development of financial markets, BAV pensionskassen AG reported an anticipated obligation to provide additional funding in the amount of €359.9k (previous year: €48.0k) to cover defined benefit obligations.

As at the balance sheet date, 31 employees had a letter of loyalty granting them a higher degree of protection against layoff. to qualify, an employee must have worked for VeR-BunD for twenty years and be at least 45 years old.

No other off-balance-sheet transactions as defined under Section 237 line 8b uGB were entered into by ApG.

2. Number of personnel

3. expenses for severance payments and pensions

4. Governing bodies of the Company the details regarding the Company's governing bodies (members of the executive Board and Supervisory Board) are provided before the management report. Dr. ulrike Baumgartner-Gabitzer was appointed as Chair-woman of the executive Board on 1 January 2014.

no loans or advances were paid to members of the executive Board.

two executive Board members were appointed throughout the financial year, which is why additional disclosures can be omitted in accordance with Section 241(4) uGB.

the remuneration of members of the Supervisory Board in the financial year amounted to €65,449 (previous year: €60,500).

5. Intra-Group relationshipsthe parent company of ApG obligated to prepare consol-idated financial statements is VERBUND AG, Am Hof 6a, 1010 Vienna.


AVeRAge 2013 2012

Salaried employees 437 427

Apprentices 25 24

462 451

€k 2013 2012

eMpLoYeeS 7,020.9 11,262.3


58 59


Net debt1)

Interest-bearing debt less cash and cash equivalents(including securities and shares classified as current securities) adjusted for closed assets and closed liabilities.

RoeReturn on equity: Result from ordinary activities in relation to equity plus untaxed reserves adjusted for deferred taxes and investment grants at the beginningof the financial year.

RoiReturn on Investment: Result before interest expense (in-cluding personnel-related interest) and taxes in relation to total capital at the beginning of the financial year.

RoCeReturn on Capital employed: Result before interest expen-se (including personnel-related interest) less attributable taxes in relation to average capital employed.

RoSReturn on Sales: Result before interest expense (including personnel-related interest) and taxes in relation to sales (revenue).

C A L C UL At ion:

Result from ordinary activities

÷ Equity as at 1 JAN

= roe

C A L C UL At ion:

Interest-bearing provisions

+ Interest-bearing liabilities

- Net balance by closed items

= Gross deBt

- Financial assets

= net deBt

C A L C UL At ion:

EBIT

÷ Total capital as at 1 JAN adjusted for closed items

= roi

C A L C UL At ion:

EBIT - taxes attributable to EBIT

÷ Average capital employed

= roCe

C A L C UL At ion:

EBIT

÷ Revenue

= ros

GLossArY

eBit earnings before Interest (including personnel-related interest) and taxes.

equity-to-assets-ratioequity and investment grants plus untaxed reserves adjusted for deferred taxes, in relation to total capital.

Fictitious debt repayment periodRatio of debt to the surplus funds from ordinary activities.

Gearing 1)

net indebtedness in relation to equity plus untaxed reserves adjusted for deferred taxes and investment grants.

Net cash flow1) Balance of cash inflows and outflows; usually broken down into net cash flow from operating activities, investment activities and financing activities.

Net current assetsCurrent assets (including current loans and current prepaid expenses) less short-term liabilities (including current deferred income).

C A L C UL At ion:

Operating profits

+ Financial result

- Interest expenses

= eBit

C A L C UL At ion:

Equity

+ Total capital adjusted for closed items

= equitY-to-Assets-rAtio

C A L C UL At ion:

Net debt

÷ Equity

= GeArinG

C A L C UL At ion:

Net current assets from operating activities

+ Net current assets from financing activities

= net Current Assets (worKinG CAPitAL)

C A L C UL At ion:

Provisions

+ Liabilities

- Other securities and shares classified as current securities

+ Surplus funds from current activities

= FiCtitious deBt rePAYMent Period

C A L C UL At ion:

Net cash flow from operating activities

+ Net cash flow from investment activities

+ Net cash flow from financing activities

= net CAsH FLow

1) The key figures have been subjected to a revision.

GLossArY

60 61


Comments on the Management reportpursuant to statutory provisions, the management report is to be audited as to whether it is consistent with the financial statements and as to whether the other disclo-sures are not misleading with respect to the Company’s position. the auditor’s report also has to contain a state-ment as to whether the management report is consistent with the financial statements.

In our opinion, the management report is consistent with the financial statements.


ernst & Youngwirtschaftsprüfungsgesellschaft m.b.H.

signed:

Mag. erich Lehner Austrian Certified Public Accountant Mag. elfriede Baumann Austrian Certified Public Accountant

report on the Financial statementsWe have audited the accompanying financial statements including the accounting records of Austrian power Grid AG, Vienna, for the fiscal year from 1 January 2013 to 31 December 2013. These financial statements comprise the balance sheet as at 31 December 2013, the income statement for the fiscal year ending 31 December 2013 and the notes.

Management’s responsibility for the Financial statements and for the Accounting systemthe Company’s legal representatives are responsible for the accounting system and for the preparation and fair presentation of the financial statements in accordance with Austrian Generally Accepted Accounting principles(Austrian GAAp). this responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of financial state-ments that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; making accounting estimates that are reasonable in the circumstances.

Auditors’ responsibility and description of type and scope of the statutory AuditOur responsibility is to express an opinion on these finan-cial statements based on our audit. We conducted our audit in accordance with laws and regulations applicable in Austria and Austrian Standards on Auditing. those stan-dards require that we comply with professional guidelines and that we plan and perform the audit to obtain reason-able assurance as to whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain au-dit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assess-ments, the auditor considers internal control relevant to the Group’s preparation and fair presentation of the finan-cial statements in order to design audit procedures that are appropriate in the circumstances, but not for the pur-pose of expressing an opinion on the effectiveness of the Group’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by manage-ment, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a reasonable basis for our audit opinion.

opinionour audit did not give rise to any objections. In our opinion,which is based on the results of our audit, the financial state-ments comply with the legal requirements and give a true and fair view of the financial position of the Company as at 31 December 2013 and of its financial performance for the fiscal year from 1 January 2013 to 31 December 2013 in accordance with Austrian Generally Accepted Accounting principles.

Auditor’s rePort*)

*) The publication or dissemination of the annual financial statement in any form other than the approved (unabridged German) version (such as an abridged version or translation) may not cite the audit certificate nor our audit without our express prior approval.

Auditor’s rePort

62

AUSTRIAN POWER GRID AG

During the reporting period, the Supervisory Board per-formed its duties and exercised its powers under the law and the Articles of Association in four Supervisory Board meetings, one extraordinary Supervisory Board meeting and four Working/Audit Committee meetings. Due to the nature of ApG’s activities, a voluntary Audit Committee was set up as defined under the Austrian Stock Corporation Act (Aktiengesetz, AktG). the Working Committee also acts as an Audit and emergency Committee. A presiding and Re-muneration Committee, which has convened three times, was further set up. the nomination Committee met once.

the managing directors of the executive Board were re-viewed by the Supervisory Board on an ongoing basis based on oral and written reports on the course of business and the position of the Company. these reviews did not lead to any objections. The accounting system and financial statements were audited by ernst & Young GmbH, Vienna. the auditor has prepared a written report on the results in which it was determined that the executive Board had provided all requested information; that the accounting and financial statements comply with the legal require-ments and give a true and fair view of the Company's financial position and financial performance; and that the management report is consistent with the annual financial statements.

The Supervisory Board reviewed these annual financial statements prepared in accordance with the Austrian Commercial Code (unternehmensgesetzbuch, uGB), for which the auditors had issued an unqualified audit opinion as well as the executive Board’s management report. the executive Board’s management report was approved and acknowledged. The annual financial state-ments were approved by the Supervisory Board, whereby they are approved in accordance with Section 96(4) AktG.

the Chairman of the Supervisory Board is in regular con-tact with the executive Board. In particular, they regularly discuss the business performance and new european developments. the executive Board generally met every fourteen days. the Chairman of the Supervisory Board and the Executive Board confirm that discussions were held in an open manner, both in the meetings of the Supervisory Board and the meetings of the Working and Audit Commit-tees as well as in the meetings of the executive Board.

the Supervisory Board would also like to thank the execu-tive Board and all of the Company’s employees for mas-tering the difficult challenges with which they have been presented.


on behalf of the Supervisory Board

Ing. Mag. peter Koren(Chairman)

rePort oF tHe suPerVisorY BoArd

owneR AnD pUBLiSHeR

Publisher: Austrian power Grid AGWagramer Straße 19, A-1220 ViennaContact: www.apg.ate-mail: [email protected]

Concept & design: Halle34og für zeitgenössischeKommunikation

Cover photo:Getty ImagesPhotos of the executive Board & employees:Martin Stöbich

translated by: Austria Sprachendienst Internationalemma Vincent

Printed by: Rema print

Barring typesetting and printing errors.Vienna, February 2014

this product complies with the Austrian eco label (umweltzeichen, uZ 24) for low-emission printed products.

austrian power grid ag annual report 2013 - apg/media/apg/news und...

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